US Justice Department Seeks to Unwind Google's $2 Billion Anthropic Deal in Antitrust Push

US Justice Department Seeks to Unwind Google's Anthropic Deal

(Bloomberg) -- Alphabet Inc.'s Google would be forced to unwind its partnership with artificial intelligence startup Anthropic if a federal judge accepts the US Justice Department's proposal to resolve a landmark antitrust case over online search. The Justice Department and a group of attorneys general recommended in a court filing Wednesday that Google be barred from acquiring, investing in or collaborating with any company that controls where consumers search for information, including query-based AI products. The provision is intended to apply to Google's Anthropic investment, according to people familiar with the Justice Department's thinking who spoke on condition of anonymity to discuss private information. The Justice Department's proposals are part of a broader effort to curb Google's alleged monopoly over online search. In the court filing, antitrust enforcers said Google must divest Chrome, citing a judge's earlier ruling that the browser "fortified" the company's dominance. Google declined to comment on the specific provision, pointing to a blog post it issued Thursday that criticized the Justice Department's proposal. The blog post said the remedy would "chill" Google's investment in artificial intelligence and "jeopardize America's global economic and technological leadership at precisely the moment it's needed most." Anthropic and the Justice Department declined to comment. Google pledged to invest $2 billion in Anthropic last year. As part of the deal, Google gained non-voting shares and certain consultation rights on significant business issues. Prior to the financing, Google also signed a major cloud agreement with Anthropic. Anthropic also received a $4 billion investment from Amazon.com Inc. Both deals received scrutiny from regulators who have worried that Big Tech is using large investments and cloud computing partnerships to dominate the emerging AI sector. The UK's antitrust watchdog previously looked into Google's Anthropic deal and concluded earlier this week that it didn't warrant further review.

US Justice Department Seeks to Unwind Google's Anthropic Deal

Alphabet Inc.'s Google would be forced to unwind its partnership with artificial intelligence startup Anthropic if a federal judge accepts the US Justice Department's proposal to resolve a landmark antitrust case over online search. The Justice Department and a group of attorneys general recommended in a court filing Wednesday that Google be barred from acquiring, investing in or collaborating with any company that controls where consumers search for information, including query-based AI products. The provision is intended to apply to Google's Anthropic investment, according to people familiar with the Justice Department's thinking who spoke on condition of anonymity to discuss private information.

Google, Anthropic Deal In Jeopardy As US Justice Department Looks To Snap Online Search Monopoly - Alphabet (NASDAQ:GOOG), Amazon.com (NASDAQ:AMZN)

Last month, U.K. antitrust officials announced an investigation into whether Google's pursuit of Anthropic could harm competition. Regulators are looking to block Google from investing $2 billion in Antrophic, a Jeff Bezos-backed rival to artificial intelligence (AI) innovator OpenAI. What Happened: The U.S. Department of Justice (DOJ) recommended in a court filing Wednesday that Alphabet Inc's GOOG GOOGL Google divest its Chrome browser to dismantle its monopoly on online search. It doesn't end there. Google should be barred from doing any deals with companies that control where consumers search for information, regulators say. That includes AI products. This puts Google's Anthropic investment at risk, according to Bloomberg, citing unnamed sources. Also Read: Nvidia's Post-Earnings Jitters: Can NVDA Stock Regain Its AI-Fueled Momentum? Google boasts over 91% global market share when it comes to online search, per GlobalStats. Why It Matters: Google needs Anthropic, or startups like it. Without it, Google is at a disadvantage, considering every major tech company is essentially in an AI arms race. Since OpenAI's ChatGPT launch in late 2022, tech giants have heavily invested in AI startups. But Google's Anthropic deal is raising concerns overseas as well. Last month, U.K. antitrust officials announced an investigation into whether Google's pursuit of Anthropic could harm competition. Meanwhile, Amazon.com Inc. AMZN managed to avoid scrutiny. The UK's competition regulator recently approved the partnership between Amazon and Anthropic, despite the Seattle-based company's significant $4 billion investment in the company. Britain's Competition and Markets Authority (CMA) confirmed the partnership does not fall under its jurisdiction. Microsoft Corp MSFT also appeased regulators when it relinquished its board observer role at OpenAI. The Redmond, Washington-based company invested over $10 billion in the AI startup. What's Next: A decision on whether the UK will require further investigation is expected by Dec. 19. In the U.S., Google plans to appeal Judge Amit Mehta's antitrust ruling in August. Mehta's decision could ultimately lead to Google divesting segments of its business, including Chrome. Price Action: Alphabet was down 4.5% to $169.24 on Thursday. Now Read: MicroStrategy Surges 674% In 2024: 5 ETFs That Benefit From MSTR's Bitcoin-Driven Growth Image: Shutterstock Market News and Data brought to you by Benzinga APIs