Alphabet Inc (NASDAQ:GOOG)’s Google is facing a new Department of Justice (DOJ) investigation, which is probing if the search giant violated antitrust laws through a deal with Character.AI, a popular AI chatbot company.
Per a Bloomberg report citing people with knowledge of the matter, the investigation is focused on whether Google structured the agreement to bypass formal government merger reviews.
Google acquired key talent from Character.AI, including its co-founders, and obtained a non-exclusive license to use its chatbot technology, while Character.AI remains independent.
Regulators are reportedly concerned that such arrangements, often called "acqui-hire" deals, might be used by dominant tech firms like Google to absorb emerging AI talent and technology without triggering regulatory scrutiny.
Google told Bloomberg it is cooperating with the investigation and added that it holds no ownership stake in Character.AI, which remains a separate company.
Shares of Alphabet traded 2.4% higher at about $173 on Thursday afternoon.