Is AI Driving Up Gas Prices? New Complaint Says Tool Is Costing Californians $135 Million a Year

California drivers have just hit major fuel retailers and tech company Kalibrate with a bombshell class-action lawsuit, alleging they used AI-powered software to illegally inflate gas prices across the state, costing consumers a staggering $135 million annually. The complaint, filed in federal court, claims Kalibrate 'Fuel Pricing' tool transformed competitive gas stations into an 'AI-powered trust,' allowing them to coordinate price hikes without traditional collusion. This legal challenge marks a critical moment for how courts and regulators will grapple with the complex antitrust implications of artificial intelligence in everyday markets. This isn't just about California already sky-high gas prices, which average around $5.56 per gallon, significantly above the national average. The lawsuit specifically invokes California recently enacted Assembly Bill 325 (AB 325), a pioneering law that took effect on January 1, 2026, aimed at cracking down on algorithmic price fixing. The plaintiffs argue that Kalibrate software, which allegedly uses both public and nonpublic competitor data to recommend prices, directly violates these protections by allowing retailers like BP, 7-Eleven, and Walmart to avoid competing on price. This case follows increasing scrutiny from federal agencies and lawmakers, like Senator Amy Klobuchar, who are actively pushing for legislation to address the broader threat of algorithmic collusion across various industries, drawing parallels to earlier antitrust battles over rent pricing software. With the defendants, including Kalibrate, mostly silent or stating they're reviewing the complaint, the lawsuit now heads into what could be a lengthy and precedent-setting legal battle. The outcome will likely shape future enforcement of antitrust laws in the age of AI, potentially influencing how companies in any sector use algorithms for pricing, and could spark a wave of similar challenges if the California drivers succeed. Consumer protection advocates and regulators nationwide will be watching closely to see if this marks a turning point in holding AI and its users accountable for market fairness.