Google’s (GOOGL) legal troubles seem to keep growing as the U.S. Department of Justice (DOJ) is now investigating whether the tech firm broke antitrust laws in its deal with AI startup Character.AI. The agreement, which was made last year, gave Google a non-exclusive license to use Character.AI’s chatbot technology. It also brought back the startup’s co-founders, Noam Shazeer and Daniel De Freitas—both former Google employees—who rejoined the company after building Character.AI. Even though the deal didn’t go through a formal merger review, the DOJ is looking into whether Google designed it that way to avoid deeper scrutiny.
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Indeed, regulators are concerned that big tech companies might be using deals like this to get ahead in AI without facing competition. These types of partnerships are common in Silicon Valley because they allow companies to gain new talent and technology quickly. But now, the government wants to know if such deals are giving companies like Google an unfair advantage as AI develops. The DOJ investigation is still in the early stages and hasn’t led to any charges, but it adds to the growing list of antitrust concerns around Google.
It is worth noting that this isn’t Google’s only legal trouble. Indeed, courts have already ruled that the company acted unfairly in the online search and advertising markets. Now, the government wants to stop Google from paying to be the default search engine and to allow closer monitoring of any future AI-related deals. However, Google says that it doesn’t own Character.AI and that the company is still independent, but the DOJ is being cautious as a decision in the wider antitrust case against Google is expected this summer.
Is Google Stock a Good Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on GOOGL stock based on 28 Buys and nine Holds assigned in the past three months. Furthermore, the average GOOGL price target of $197.69 per share implies 15% upside potential from current levels.
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