Add source Login
Microsoft accused of trying to manipulate AI pricing via its OpenAI investment

Microsoft accused of trying to manipulate AI pricing via its OpenAI investment

Microsoft, which is no stranger to antitrust accusations , is being sued for allegedly manipulating AI prices via its investment in OpenAI. The lawsuit , filed Monday in the US District court in the Northern District of California, argues that Microsoft has used its OpenAI influence to vastly increase AI prices. “ChatGPT prices were inflated since the service’s inception, with price levels reaching an eye-popping 100 to 200 times competitors’ prices on a per-token basis amidst a February 2025 price war,” the filing said. “A secretive agreement struck between OpenAI and Microsoft early in OpenAI’s development allowed Microsoft to control the supply of compute to its horizontal competitor’s products. It used an exclusivity clause to restrict OpenAI’s product output, and to impose a price–or, conversely, output and quality–floor on its competitor OpenAI’s ChatGPT products.” Contacted by Computerworld , Microsoft declined to address the lawsuit’s specific details, but did say in an email, “while we are still reviewing the details of the complaint, we believe that our OpenAI partnership promotes competition, innovation, and responsible AI development.” Industry observers were skeptical that the litigation would have much of an impact, given the large number of major companies selling AI, including Google, Amazon, and Anthropic, that are presumably beyond Microsoft’s direct influence. Taps into policy concerns Abhishek Singh , a partner at the Everest Group, said that the litigation might encourage regulatory efforts, but that he doubts it would have any direct impact on Microsoft. “It taps into a genuine policy concern about the concentration of power in AI infrastructure and pricing, but antitrust cases like this are hard to win,” Singh said. “The plaintiffs will have to show not just dominance, but deliberate collusion and measurable consumer harm, which is a high bar.” But Singh added that even if this specific lawsuit doesn’t go anywhere, it could easily prompt secondary reactions from legislators and regulators. “In my personal view, the case is not frivolous, but it doesn’t have strong legs as an anti-competitive lawsuit. What it will likely do, however, is push the conversation toward transparency in AI pricing and infrastructure access,” Singh said. “Much of what enterprises perceive as price control in AI is, in reality, a reflection of scarce GPU supply and the costs of training and running ever-larger models, rather than market manipulation.” If the lawsuit clears the initial legal hurdles and is allowed to proceed, Singh said, “the most plausible outcome is increased regulatory and market pressure for transparency rather than anything structural. Microsoft will argue that its partnership with OpenAI accelerated innovation and democratized access to generative AI—and that narrative is credible.” Singh also observed that the essence of the monopolistic and anti-trust accusations have been argued before, and Microsoft has typically won those arguments. “[Because] the lawsuit primarily hinges on the claim that Microsoft effectively controls OpenAI and has used that position to distort AI pricing, it’s important to note that  regulators in the UK and EU have already examined Microsoft’s relationship with OpenAI and declined to classify it as a merger giving Microsoft control. Also, more recently, the partnership itself has evolved to allow OpenAI to source non-Microsoft compute, which weakens the argument that Microsoft has a lock on AI infrastructure,” Singh said. Customers should rethink AI contracts The most critical aspect is whether this litigation will lead to any reimbursement for enterprises, which seems unlikely. But rebates aside, Singh suggests that this lawsuit does suggest some changes for enterprise IT to consider. “For enterprise IT executives, the key takeaway is to recognize that AI pricing and infrastructure access are becoming strategic variables. This lawsuit reinforces the need to seek transparency in AI cost structures, diversify vendor dependencies, and build flexibility into commercial arrangements,” Singh said. “The broader signal is about vigilance, understanding where market influence is concentrating, and ensuring enterprise strategies remain adaptable as the AI ecosystem matures.” Cybersecurity consultant Brian Levine , a former federal prosecutor who today serves as the executive director of FormerGov, a directory of former government and military specialists, argues that Microsoft has had decades of experience fending off various antitrust accusations. For enterprise IT executives, though, the actions mean that they must work with their general counsel to make sure that any Microsoft contracts acknowledge antitrust possibilities, and that the agreements include wording that will protect the enterprise should court rulings prove unfavorable to Microsoft. “If I was an enterprise CIO, the only immediate action is, if we are considering working with either of these entities, to write in a provision that gives [the enterprise] room to renegotiate to the extent that this case reaches a judgment or they reach a settlement that may impact the contract,” Levine said, adding, “but that language may be implied anyway.” Douglas Brush , a special master with the US federal courts, said that enterprise IT must rethink all AI contracts in light of these kinds of antitrust accusations. “The best approach is to use short contracts with re-openers, transparent pricing with safeguards, multiple cloud options, and an economics model that prioritizes consumption. This allows [enterprises] to benefit from falling prices, protect themselves when they rise, and keep the business running regardless of any single vendor’s motives,” Brush advised. “Budgeting needs to treat AI like a commodity input, not a fixed software license — [cost of goods sold] versus [operating expense]. … Quarterly repricing and automatic rebases to current schedules are table stakes.” The lawsuit does acknowledge that OpenAI eventually slashed token prices “by as much as 80 percent,” but argued that merely proved its point. The ultimate price reduction “makes clear” that Microsoft’s actions were “the but-for and proximate cause of the price inflation/supply and output restriction,” the lawsuit said, adding, “but the restraint—and Microsoft’s control over it—still remains, lingering as a sword of Damocles over OpenAI wielded by one of its principal competitors.”

Driven by upgrades and AI, the smartphone market is growing – IDC

Driven by upgrades and AI, the smartphone market is growing – IDC

The global smartphone market grew by 2.6% in the third quarter of the year, equivalent to 322.7 million units, according to preliminary data from IDC . The research firm traces the growth to upgrades to new premium phones and a growing interest in affordable AI-enabled models. Apple and Samsung delivered the strongest results. Apple reported its best July quarter ever thanks in part to the new iPhone 17 series . Meanwhile, Samsung achieved record growth with its latest foldable models, the Galaxy Z Fold 7 and Z Flip 7. Manufacturers like Xiaomi, Transsion, and Vivo also grew strongly. Xiaomi strengthened its position in Europe and Latin America with the successful Redmi Note and Poco series, while Transsion expanded rapidly in Africa thanks to low prices and efficient distribution. Vivo grew in several emerging markets with AI-enhanced cameras and aggressive online promotions. “The increased demand for the latest AI-based products is expected to lead to a strong finish to 2025, driven by aggressive price promotions and robust product portfolios from leading vendors,” Anthony Scarsell, research director for Mobile Phones at IDC, said in a statement.

Unlicensed teen driver 'huffing nangs' moments before crash that killed 5

Unlicensed teen driver 'huffing nangs' moments before crash that killed 5

An unlicensed teen driver who crossed a centreline and ploughed into an oncoming vehicle was seen “huffing nangs” in the moments before a deadly crash that claimed five lives. Driver Piata Amelia-Blaise Otufangavalu, her partner Suliasi Halapea Lefai and her friend Cheyene Love-Mitchell all died in the crash on State Highway 3, just north of Te Awamutu in May 2024. Whatawhata couple Paul and Lois Grimmer, who were in the car heading in the opposite direction, were also killed. In findings released today, Coroner Matthew Bates said not only had Otufangavalu been huffing nitrous oxide, but there was cannabis in her system, which potentially exacerbated her impairment. The 19-year-old was also not meant to be on the road because she had never held a driver’s licence, “and therefore should not have been operating any motor vehicle on a road”. Coroner Bates said the fatal crash was an important reminder about the dangers of driving while impaired. “The tragic consequences of impaired driving have the potential to touch any of us. “My sincere hope is that continued publicity, education, and enforcement intended to free our roads of impaired drivers gains greater traction.” He said it remained unknown just how much nitrous oxide was in the young driver’s blood because the former Institute of Environmental Science and Research (ESR), now the Institute for Public Health and Forensic Science (PHF Science), did not have the technology available to measure it. However, Otufangavalu and Love-Mitchell were seen “huffing” in their vehicle on their way to pick up Lefai from Mystery Creek on May 24. Then the trio, all aged 19, were also caught on a vehicle’s CCTV with deflating green balloons “immediately” before the crash. ‘Big green balloons’ Otufangavalu and Lefai lived together in Auckland, while Love-Mitchell lived in Te Awamutu. The two women had been good friends “for many years”, according to Love-Mitchell’s father. The Toyota had been lent to Otufangavalu two months earlier because she was considering buying it. On Friday, May 24, Otufangavalu and Lefai travelled to Te Awamutu for a baby shower. They were meant to head home the next day, but their car broke down so they stayed at her grandmother’s house. Her grandmother last saw her about 10am on Tuesday, May 28, when she brought breakfast to her work. The pair ate and chatted together for about 40 minutes before she left, appearing to be in “high spirits ... and well rested”. Otufangavalu was then going to visit a friend before picking up Lefai, who was working at a Fieldays event at Mystery Creek. On their way to pick him up, between 3pm and 3.30pm, a passenger in another car saw the Toyota come “right up behind [them] and was trying to pass [them] using the median strip in the middle of the road”. The remains of the Toyota vehicle which was driven by Piata Amelia-Blase Otufangavalu after it crashed into another vehicle, killing all the occupants of both cars. Photo / NZ Police The Toyota continued to tailgate and beep its horn. Another motorist, described in the inquest findings as Witness C said they too could see both the driver and passenger in the Toyota with “big green balloons” and thought they were “huffing nangs”. “Huffing nangs” refers to a balloon being filled with nitrous oxide, then huffing the gas to get a lightheaded feeling or a bit of a buzz. Otufangavalu continued tailgating, beeping, and swerving, so the second motorist eventually passed three cars ahead to try to distance themselves from her. However, Otufangavalu did the same and moved back in behind them, before they turned off SH3. Otufangavalu continued towards Hamilton. At 4.43pm, Otufangavalu returned heading south, with Lefai as front passenger, and Love-Mitchell in the back. The couple were wearing seatbelts, but it was unclear if Love-Mitchell was wearing hers. Another motorist, Witness B, recalled Otufangavalu was behind him and said he saw the occupants “doing nangs/or NOS”, by inhaling from...

Canterbury whitebaiters given the thumbs up

Canterbury whitebaiters given the thumbs up

DOC rangers, police, Waimakariri District Council and Christchurch City Council staff and patrolled the Ōtākaro/Avon, Waimakariri, Kaiapoi, Pūharakekenui/Styx rivers and Otipua/Saltwater Creek speaking to hundreds of fishers. Photo: DOC Hundreds of whitebaiters came under scrutiny on several Canterbury waterways last week, including the Avon, Styx, Waimakariri and Kaiapoi rivers and Saltwater Creek.