Google CEO Sundar Pichai
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Late on Wednesday, the U.S. Department of Justice filed sweeping proposals for remedies in Google’s landmark antitrust case, where a federal judge ruled earlier this year that it has an illegal monopoly in the online search market. Among the marquee requests: Forcing Google to sell off its popular Chrome browser, banning multi-billion dollar distribution contracts like the one Google has with Apple, or potentially barring Google from requiring Android phone makers to include Google apps on their devices.
But beyond those headline-grabbing demands, the government also included provisions that could hobble Google’s future in the competitive race to control the future of AI. The DOJ proposed Google must sell any stakes in AI companies with technology that could compete in search, and divest within six months of a final judgment from the court. The agency also recommended barring any new acquisitions, joint ventures or partnerships with AI companies competing in search.
Notably, if the judge in the case agrees, that could mean forcing Google to sell off its investment in Anthropic, the firm founded by OpenAI defectors in 2021 and could reportedly be valued at up to $40 billion. Last year, Google said it would invest $2 billion in Anthropic, following a $4 billion deal Amazon announced with the company months before. On Wednesday, regulators in the U.K. cleared the investment from Google, saying it wouldn’t conduct a full-scale investigation to scrutinize the deal after an initial probe.
Anthropic is the maker of Claude, a language model that can generate answers to questions, similar to Google’s own Gemini model, which was integrated into Google’s search engine earlier this year. While the startup doesn’t pitch Claude as a search product, those kinds of chatbots are widely seen as a threat to Google search. Other startups, like Nvidia and Jeff Bezos-backed Perplexity, are more forthright about competing with Google. “It’s a good morning to be Perplexity,” one prominent AI investor told Forbes. Also of note, the DOJ proposal would take Perplexity off the table as a potential Google acquisition target. (Disclosure: Forbes has threatened legal action against Perplexity for plagiarizing our content.)
The filing also proposes that Google gives all publishers and content creators — including those on Google-owned YouTube — a simple way to opt out of having their content be used to train or file-tune Google’s AI models or other AI products, and vow not to retaliate against those who choose to do so.
“The old companies are trying to seize control of the new technology and insulate themselves against displacement.”
As artificial intelligence continues to take over the tech world, the government is trying to make sure an emerging and powerful new technology isn’t unfairly dominated by the giant incumbents, said John Kwoka, an economics and antitrust professor at Northeastern University.
“The old companies are trying to seize control of the new technology and insulate themselves against displacement,” he told Forbes. “This is part of a forward-looking proposed remedy.”
But it’s also out of left field, as AI wasn’t a major topic in the case. “It seems so far beyond anything that was in the original case that I can’t take it seriously,” said George Hay, an antitrust professor at Cornell Law School.
Google declined to comment beyond a blog post published Thursday by Google Chief Legal Officer Kent Walker, which calls the DOJ filing an “extreme proposal” that would “chill our investment in artificial intelligence, perhaps the most important innovation of our time, where Google plays a leading role.”
While the DOJ proposal is specifically concerned with AI investments that would boost Google in search, the tech giant has investments in other AI companies focused on broader use cases. According to PitchBook, it has a stake in Runway, which builds AI to generate videos, and Tools For Humanity, the company started by OpenAI cofounder Sam Altman, which manages the Worldcoin cryptocurrency and makes AI authentication tools.
Anthropic declined to comment. Runway and Tools For Humanity didn’t immediately respond to requests for comment. Google didn’t answer questions regarding those investments.
It’s also unclear if the divestment proposals would apply to Google parent Alphabet’s two venture firms — GV and CapitalG — since the DOJ case focused squarely on Google and not the other subsidiaries of its parent. GV referred questions to Google, which declined to comment. CapitalG didn’t respond to a request for comment.
The DOJ monopoly case went to trial last year, probing into Google’s search engine, the lifeblood of the company’s sprawling digital advertising business, which generates the vast bulk of parent Alphabet’s $307.4 billion in annual revenue. During proceedings, the federal government argued that Google used several illegal tactics to build and maintain a monopoly in online search, like inking an agreement with Apple worth tens of billions of dollars that made Google the default search engine on iPhones and other Apple products. Google has said its dominant position comes from the quality of its products, arguing it gives consumers easy options to change their defaults. Earlier this year, Judge Amit Mehta ruled against Google, triggering a second trial to determine potential remedies, which is slated to begin in April. Judge Mehta’s decision is expected by next August.
William Kovocic, a former FTC chairman and now a law professor at George Washington University, said Google is likely to argue that the AI restrictions would hamstring the company, leaving a technological opening for China.
Google has been a leader in AI for years, launching its Google Brain lab in 2011, and buying the vaunted AI lab DeepMind in 2014. Three years later, it kicked off the current generative AI wave when Google Brain researchers invented transformers, the AI architecture underpinning Gemini and ChatGPT. But despite the early lead, Google was caught flat-footed when OpenAI released ChatGPT two years ago, beating Google to market with a technology it invented and igniting a global frenzy over AI.
OpenAI was partly aided by its $13 billion deal with Microsoft, which provided support and computing power for the startup. The partnership also revitalized a lumbering Microsoft, leaving CEO Satya Nadella to boast that his company made Google “dance” when Microsoft integrated ChatGPT into its Bing search engine. The DOJ’s AI proposals would bar Google from inking similar partnerships.
But because of Google’s extensive work in the field, it’s unlikely the AI proposals would significantly hold the company back, said Bob O’Donnell, founder of the research firm Technalysis. Unlike Google, Microsoft needed the OpenAI deal because it didn’t have the in-house AI chops. “Even if their hands are tied and they’re prevented from moving forward, they’ve been doing AI longer than anybody,” he said. “I think they’d still be okay.”
Additional reporting by Alex Konrad.