Google Faces DOJ Antitrust Probe Over Character.AI Deal

Google Faces Antitrust Investigation Over Deal for AI-Fueled Chatbots

The Justice Department is probing whether Alphabet Inc.'s Google violated antitrust law with an agreement to use the artificial intelligence technology of a popular chatbot maker, according to people with knowledge of the matter. Antitrust enforcers have recently told Google they're examining whether it structured an agreement with the company known as Character.AI to avoid formal government merger scrutiny, said the people, who asked not to be identified discussing the confidential probe. In a deal with Google last year, the founders of the chatbot maker joined the search firm, which also got a non-exclusive license to use their venture's technology.

Google faces DoJ probe over deal for AI tech, Bloomberg Law reports

May 22 (Reuters) - The U.S. Justice Department is probing whether Alphabet's (GOOGL.O), opens new tab Google violated antitrust law in its agreement with Character.AI that allows the tech giant to use the AI startup's technology, Bloomberg Law reported on Thursday. Antitrust enforcers have recently told Google they are examining whether it structured an agreement with Character.AI to avoid formal government merger scrutiny, the report said, citing people with knowledge of the matter. Google last year signed a licensing deal with Character.AI that granted the search engine giant a non-exclusive license to the chatbot maker's large language model technology. The company also hired Character.AI co-founders Noam Shazeer and Daniel De Freitas, both former Google employees. "We're always happy to answer any questions from regulators," a Google spokesperson said. "We're excited that talent from Character.AI joined the company but we have no ownership stake and they remain a separate company." Character.AI and the DoJ did not immediately respond to Reuters requests for comment. The DOJ can scrutinize whether the deal itself is anti-competitive even if did not require a formal review, the report said, adding the antitrust probe was in early stages and may not lead to an enforcement action. Reporting by Deborah Sophia in Bengaluru; Editing by Pooja Desai and Sriraj Kalluvila Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Artificial Intelligence

Google Said to Face DOJ Probe Over Character.AI Deal

Other tech giants have struck similar AI deals in the past year The US Justice Department is probing whether Alphabet's Google violated antitrust law in its agreement with Character.AI that allows the tech giant to use the AI startup's technology, Bloomberg Law reported on Thursday. Antitrust enforcers have recently told Google they are examining whether the company structured the agreement with Character.AI to avoid formal government merger scrutiny, the report said, citing people with knowledge of the matter. Google last year signed a licensing deal with Character.AI that granted the search engine giant a non-exclusive license to the chatbot maker's large language model technology. The company also hired Character.AI co-founders Noam Shazeer and Daniel De Freitas, both former Google employees. "We're always happy to answer any questions from regulators," a Google spokesperson said. "We're excited that talent from Character.AI joined the company but we have no ownership stake and they remain a separate company." Character.AI did not immediately respond to a Reuters request for comment, while the DOJ declined to comment. The DOJ can scrutinise whether the deal itself is anti-competitive even if it did not require a formal review, the report said, adding the antitrust probe was in the early stages and may not lead to an enforcement action. Other tech giants have struck similar deals in the past year in their push for growth in the heated generative AI race. Microsoft struck a $650 million (roughly Rs. 5,569 crore) deal with Inflection AI in March 2024, to use the AI startup's models and hire its staff, while Amazon hired AI firm Adept's co-founders and some of its team last June. Both deals had drawn regulatory scrutiny. Google is already under pressure from regulators, with the DOJ seeking to break up the company's dominance in the online search market and in digital advertising technology in two separate cases. Earlier this month, the US Federal Trade Commission backed the DOJ's proposal to make Google share search data with competitors. © Thomson Reuters 2025

Google faces DOJ probe over Character. AI deal: Report

Other tech giants have struck similar deals in the past year in their push for growth in the heated generative AI race. Microsoft struck a $650 million deal with Inflection AI in March 2024, to use the AI startup's models and hire its staff, while Amazon hired AI firm Adept's co-founders and some of its team last June. Both deals had drawn regulatory scrutiny.The US Justice Department is probing whether Alphabet's Google violated antitrust law in its agreement with Character.AI that allows the tech giant to use the AI startup's technology, Bloomberg Law reported on Thursday. Antitrust enforcers have recently told Google they are examining whether the company structured the agreement with Character.AI to avoid formal government merger scrutiny, the report said, citing people with knowledge of the matter. Google last year signed a licensing deal with Character.AI that granted the search engine giant a non-exclusive license to the chatbot maker's large language model technology. The company also hired Character.AI cofounders Noam Shazeer and Daniel De Freitas, both former Google employees. "We're always happy to answer any questions from regulators," a Google spokesperson said. "We're excited that talent from Character.AI joined the company but we have no ownership stake and they remain a separate company." Character.AI did not immediately respond to a Reuters request for comment, while the DOJ declined to comment. The DOJ can scrutinise whether the deal itself is anti-competitive even if it did not require a formal review, the report said, adding the antitrust probe was in the early stages and may not lead to an enforcement action. Other tech giants have struck similar deals in the past year in their push for growth in the heated generative AI race. Microsoft struck a $650 million deal with Inflection AI in March 2024, to use the AI startup's models and hire its staff, while Amazon hired AI firm Adept's co-founders and some of its team last June. Both deals had drawn regulatory scrutiny. Google is already under pressure from regulators, with the DOJ seeking to break up the company's dominance in the online search market and in digital advertising technology in two separate cases. Earlier this month, the US Federal Trade Commission backed the DOJ's proposal to make Google share search data with competitors.

Google's Character.AI Deal Reportedly Draws Antitrust Attention | PYMNTS.com

The Department of Justice is reportedly probing whether a Google artificial intelligence (AI) deal violates antitrust law. At issue is Google's agreement with chatbot maker Character.AI to use that company's AI technology, Bloomberg News reported Thursday (May 22), citing sources familiar with the matter. According to those sources, regulators recently informed Google they are investigating whether the company designed that agreement to avoid government merger scrutiny. Google signed an agreement with Character last year in which that company's founders joined Google, which received a nonexclusive license to use their venture's technology. The Bloomberg report said this sort of deal has been embraced in Silicon Valley as a way for big tech companies to garner expertise for new projects. At the same time, regulators worry that companies such as Google are using their dominant market position to potentially stifle competition from up-and-coming innovators. Peter Schottenfels, a company spokesperson, told PYMNTS via emailed statement that the search giant is "always happy to answer any questions from regulators." "We're excited that talent from Character.Ai has joined the company, but we have no ownership stake and they remain a separate company," he added. Google has lost a pair of antitrust cases brought by the U.S. government over its anticompetitive practices as it monopolizes the search and online tech markets. The company has said it plans to appeal in both cases. Meanwhile, PYMNTS wrote earlier this month about Google's effort to test placing ads inside AI chatbot conversations "in an aggressive move to protect its bread and butter: search ads." The company has begun embedding ads directly into conversations with AI chatbots from startups, including iAsk and Liner. This marks an expansion of Google's AdSense for Search network and sets the stage for a new era of AI-powered monetization. Kaveh Vahdat, president of marketing firm RiseOpp, said in an interview with PYMNTS that Google's move is "less about short-term monetization and more about safeguarding its long-term control over the discovery layer of the internet." As users pivot to AI chatbots, Vahdat said, Google risks losing out on the behavioral data and ad real estate that support its business model.

Google faces new DOJ antitrust probe over partnership with AI...

Google reportedly faces a fresh Justice Department probe over whether it violated antitrust law through its partnership with artificial intelligence chatbot firm Character.AI. DOJ officials informed Google that they are investigating whether it purposely structured a deal with Character.AI last year to avoid regulatory scrutiny. The Big Tech giant hired key members of Character.AI engineering team - including its co-founders - and secured a non-exclusive license to use its chatbot technology. "We're always happy to answer any questions from regulators," a Google spokesperson said in a statement. "We're excited that talent from Character.ai joined the company but we have no ownership stake and they remain a separate company." The DOJ declined to comment. Character.AI did not immediately respond to a request for comment. Google has not been accused of any wrongdoing, people familiar with the matter told Bloomberg, adding that the probe was in its early stages and wouldn't necessarily result in an enforcement action. Both of Character.AI's co-founders, Noam Shazeer and Daniel De Freitas, are former Google employees who have now returned to the company. The DOJ probe is the latest legal headache for both Google and Character.AI, whose chatbot impersonates characters that can have lifelike conversations with users. Character.AI is in the midst of a high-profile wrongful death lawsuit filed by the mother of 14-year-old son Sewell Setzer III, who committed suicide. The lawsuit alleges that Character.AI's chatbot created a character patterned on the HBO series "Game of Thrones" that pulled the teen into emotionally and sexually abusive relationship that eventually led to his death. Earlier this week, a federal judge allowed the lawsuit to proceed while shooting down Character.AI's argument that it was protected by the First Amendment. Meanwhile, Google has lost two historic antitrust cases brought the DOJ - one aimed at its online search empire and another focused on its digital advertising technology. In both cases, federal judges are considering remedies that could include a breakup of the company. A decision in the search case is expected by August and could force Google to sell off its Chrome web browser. The DOJ has asked US District Judge Amit Mehta, who is presiding over the search remedies, to consider long-term implications of Google's AI products when considering how best to end its monopoly over search. Google's deal with Character.AI has drawn comparisons to so-called "acqui-hire" transactions that have gained popularity in Silicon Valley as regulators in the US and abroad step up their scrutiny of tech firms. Some critics argue that the deals allow tech firms to quietly disarm startups before they can threaten their businesses. Last year, the United Kingdom's competition watchdog opened a probe into Microsoft's mass hiring of employees from Inflection AI - but ultimately cleared it.

Google's deal with AI startup under US Justice Department probe - Bloomberg By Investing.com

Investing.com -- Alphabet (NASDAQ:GOOGL)'s Google is under investigation by the U.S. Justice Department over potential antitrust law violations, according to a report from Bloomberg, citing people familiar with the matter. The probe centers on Google's agreement with AI startup Character.AI, which allows Google to use the startup's technology. Antitrust officials are examining whether Google structured the agreement to evade formal government merger scrutiny. In the deal made last year, Character.AI's founders joined Google, and Google obtained a non-exclusive license to use the startup's technology. These types of agreements are common in Silicon Valley as a way for companies to secure expertise for new projects. Regulators, however, have become attentive to these arrangements, concerned that established tech companies may use their influence to stifle competition from innovative newcomers. Google's spokesperson, Peter Schottenfels, stated in an email that Google is "always happy to answer any questions from regulators." He added that while Character.AI's talent has joined Google, Google has no ownership stake in Character.AI, which remains a separate company.