Google faces DoJ antitrust probe over Character.AI deal: report

Alphabet Inc.'s Google is under investigation by the US Department of Justice (DOJ) for a potential antitrust violation concerning its partnership with AI startup Character.AI, according to a Bloomberg Law report.

The DOJ is examining whether Google structured the deal to circumvent formal merger scrutiny, a move that could have significant implications for the tech industry's regulatory landscape.

In 2024, Google entered into an agreement with Character.AI, granting the tech giant a non-exclusive license to use the startup's advanced chatbot technology.

As part of the deal, Character.AI's co-founders, Noam Shazeer and Daniel De Freitas, along with other team members, rejoined Google.

While Google maintains that Character.AI remains an independent entity with no ownership stake from Google, regulators are scrutinising the arrangement to determine if it effectively constitutes an acquisition designed to bypass antitrust review processes.

This investigation adds to a series of legal challenges facing Google.

The Justice Department is probing whether Google violated antitrust law with an agreement to use the AI technology of a popular chatbot maker https://t.co/ePBihVMb9a

— Bloomberg (@business) May 22, 2025

Earlier this year, a federal judge ruled that Google had illegally monopolised the online search and advertising markets, leading the DOJ to propose remedies that could include forcing Google to divest its Chrome browser and Android operating system.

The DOJ is also considering measures to ensure competitive fairness in the rapidly evolving AI sector.

The Character.AI deal has drawn comparisons to similar arrangements by other tech giants.

For instance, Microsoft's $650 million agreement with Inflection AI and Amazon's acquisition of AI talent from Adept have also attracted regulatory attention.

These deals are being examined to assess whether they provide established companies with an unfair advantage over emerging competitors in the AI field.

🔥✌️More Insights from the Google vs. DOJ Antitrust trial about user data👇 pic.twitter.com/huOFDIPong

— ✌️Oᒪᗩᖴ KOᑭᑭ 🔥 (@Olaf_Kopp) May 23, 2025

As the DOJ's investigation progresses, the outcome could reshape how future AI partnerships and acquisitions are evaluated under antitrust laws, potentially leading to stricter oversight of Big Tech's expansion into the AI market.