Alphabet Inc.’s Google is facing yet another Justice Department probe, this time over whether it violated antitrust law through its partnership with artificial intelligence (AI) chatbot firm Character.AI.
Antitrust officials recently informed Google they are examining the structure of an agreement with Character.AI last year and if it attempted to sidestep a formal government merger review when it hired Character.AI’s founders last year and received a non-exclusive license, Bloomberg reported Thursday, citing unnamed sources familiar with the matter.
Google has not been accused of any wrongdoing in the probe, which is in its early stages and may not lead to an enforcement action, the report said. Character.AI and the DoJ were not immediately available for comment.
“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.”
Google’s arrangement with Character.AI, described as an acqui-hire of talent by industry experts, mirrors similar deals in recent months that have drawn regulatory scrutiny as tech giants scramble to pick up technology and expertise in the overheated generative AI race. Last June, Amazon.com Inc. hired the co-founders and some staff from AI firm Adept; in March 2024, Microsoft Corp. landed a $650 million deal with Inflection AI to use its AI models and pick up staff.
Google already is toiling away in federal court with regulators. The Justice Department is seeking to break up both the company’s online search business and its digital advertising technology business in two separate cases. Earlier this month, the Federal Trade Commission backed the DoJ’s proposal to make Google share search data with competitors. A decision in the search case is expected by August.
Justice officials have asked U.S. District Court 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 search dominance.
