The US Justice Department is probing whether Alphabet's Google violated antitrust law in its agreement with Character.AI that allows the tech giant to use the AI startup's technology, Bloomberg Law reported on Thursday.
Antitrust enforcers have recently told Google they are examining whether it structured an agreement with Character.AI to avoid formal government merger scrutiny, the report said, citing people with knowledge of the matter.
Google last year signed a licensing deal with Character.AI that granted the search engine giant a non-exclusive license to the chatbot maker's large language model technology.
The company also hired Character.AI co-founders Noam Shazeer and Daniel De Freitas, both former Google employees.
"We're always happy to answer any questions from regulators," a Google spokesperson said. "We're excited that talent from Character.AI joined the company but we have no ownership stake and they remain a separate company."
Character.AI and the DoJ did not immediately respond to Reuters requests for comment.
The DOJ can scrutinize whether the deal itself is anti-competitive even if did not require a formal review, the report said, adding the antitrust probe was in early stages and may not lead to an enforcement action.
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