Why the DOJ is trying to limit Google’s AI future

Late Wednesday, the US Justice Department filed sweeping proposals for remedies in Google’s landmark antitrust case, in which a federal judge ruled earlier this year that it has an illegal monopoly on the online search market. Among the big requests: forcing Google to sell its popular Chrome browser, banning multibillion-dollar distribution contracts like the one Google has with Apple, or potentially preventing Google from requiring Android phone makers to include Google apps on their devices .

But in addition to the headline-grabbing claims, the government also included provisions that could hamper Google’s future in the race to control the future of artificial intelligence. The DOJ suggested that Google must sell any stake in AI companies with technology that could compete in search and divest within six months of a final court ruling. The agency also recommended excluding new acquisitions, joint ventures or partnerships with AI companies that compete in search.

Notably, if the judge in the case agrees, it could mean that Google would be forced to sell its investment in Anthropic, the company founded by OpenAI defectors in 2021 that 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, authorities in the UK approved the investment by Google and said they would not conduct a full-scale investigation to scrutinize the deal after an initial investigation.

Anthropic is the creator 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. Although the startup is not pitching Claude as a search product, these kinds of chatbots are widely seen as a threat to Google search. Other startups, like Perplexity, backed by Nvidia and Jeff Bezos, are more forthright about competing with Google. “It’s a good morning to be Perplexity,” one prominent AI investor told me Forbes. It should also be noted that the DOJ proposal would take Perplexity off the table as a potential Google acquisition target. (Disclosure: Forbes has threatened to sue Perplexity for plagiarizing our content.)

The filing also proposes that Google provide all publishers and content creators — including those on Google-owned YouTube — with a simple way to opt out of having their content used to train or fine-tune Google’s AI models or other AI products, and promise 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 ensure that a new and powerful new technology is not unfairly dominated by the giant incumbents, said John Kwoka, a professor of economics and antitrust at Northeastern University.

“The old companies are trying to seize control of the new technology and insulate themselves against crowding out,” he said Forbes. “This is part of a forward-looking proposed remedy.”

But it’s also out of left field, since AI wasn’t a big issue 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 comment blog post published Thursday by Google Chief Legal Officer Kent Walker, who calls the DOJ filing an “extreme proposal” that would “chill our investment in artificial intelligence, perhaps the most important innovation of our time, with Google playing 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 co-founder Sam Altman, which manages the Worldcoin cryptocurrency and makes AI authentication tools.

Anthropic declined to comment. Runway and Tools For Humanity did not immediately respond to requests for comment. Google did not respond to questions regarding these investments.

It’s also unclear whether the divestment proposals would apply to Google parent Alphabet’s two venture firms — GV and CapitalG — since the DOJ case focused directly on Google and not the other subsidiaries of its parent company. GV referred questions to Google, which declined to comment. CapitalG did not respond to a request for comment.

The DOJ monopoly case went to trial last year and probed into Google’s search engine, the lifeblood of the company’s sprawling digital advertising business, which generates the majority of parent Alphabet’s $307.4 billion in annual revenue. During the lawsuit, the federal government alleged that Google used several illegal tactics to build and maintain a monopoly in online search, such as striking a deal with Apple worth tens of billions of dollars that made Google the default search engine on iPhones and other Apple products. Google has said that its dominant position comes from the quality of its products, and claims that it gives consumers easy options to change their default settings. Earlier this year, Judge Amit Mehta ruled against Google, triggering a second trial to determine potential remedies, which is scheduled to begin in April. Judge Mehta’s decision is expected in August next year.

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 hamper the company and leave a technological opening for China.

Google has been a leader in AI for years, launching its Google Brain lab in 2011 and acquiring the famous AI lab DeepMind in 2014. Three years later, it started the current generative AI wave when Google Brain researchers invented transformers, The AI ​​architecture supports 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 helped in part by its $13 billion deal with Microsoft, which provided support and computing power to the startup. The partnership also revitalized a struggling 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 proposal would prevent Google from entering into similar partnerships.

But because of Google’s extensive work in the field, the AI ​​proposals are unlikely to significantly hold back the company, said Bob O’Donnell, founder of research firm Technalysis. Unlike Google, Microsoft needed the OpenAI deal because it didn’t have the internal AI chops. “Even if their hands are tied and they are prevented from moving forward, they have been doing artificial intelligence longer than anyone else,” he said. “I think they would still be okay.”

Additional reporting by Alex Konrad.