The U.S. Department of Justice is investigating Google, a subsidiary of Alphabet (GOOGL, Financial), over a potential antitrust violation related to its AI technology agreement with Character.AI, a popular chatbot company. Insiders, who preferred to remain anonymous, revealed that antitrust officials have recently informed Google of the investigation. The focus is on whether Google structured its agreement with Character.AI to bypass formal government merger reviews.
Under last year's agreement, Character.AI's founders joined Google, granting Google a non-exclusive license to use the company's technology. Such deals are common in Silicon Valley, allowing established firms to infuse new projects with specialized expertise. However, regulators are concerned that large tech companies might leverage these agreements to stifle competition from emerging innovators.
Google's spokesperson, Peter Schottenfels, stated that the company is open to addressing any regulatory inquiries. He emphasized that while Google benefits from Character.AI's talent, it holds no equity in the company, which remains independent. Although the DOJ can investigate transactions for anti-competitive behavior without a formal review, Google has not been accused of any wrongdoing, and the investigation is still in its early stages.
