New Google antitrust challenge aims at AI deal: report

Google (NASDAQ:GOOG) (NASDAQ:GOOGL) is reportedly facing still more antitrust scrutiny as it continues investment in artificial intelligence, and the Justice Dept. looks to keep more developed companies from warding off competition in the fast-growing area.

The DOJ is investigating whether Google’s (NASDAQ:GOOG) (NASDAQ:GOOGL) technology deal with chatbot maker Character.AI violated antitrust law in an attempt to avoid merger scrutiny, Bloomberg reported, citing people with knowledge of the matter.

That agreement got Google a non-exclusive license for Character.AI’s tech, and its founders rejoined Google as well after leaving years ago to start the new company. It’s led to an early-stage probe from the Justice Dept. even though the transaction didn’t call for a formal review, the report notes.

Google is cooperating and “We’re excited that talent from Character.AI has joined the company but we have no ownership stake and they remain a separate company,” a Google spokesperson said in response, according to the report.

The news opens yet another front in the government’s anticompetitive scrutiny of Google. Federal courts have already found the company illegally monopolized online search and ad technology.

Alphabet stock moved somewhat higher Thursday — (GOOG) +2.7%, (GOOGL) +2.9% — for the second straight day following Tuesday’s Google I/O developer conference, where it revealed its latest innovations in AI tech.