U.S. DOJ Investigates Google’s Deal with Character.AI Over Potential Antitrust Violations

The U.S. Department of Justice (DOJ) is investigating whether Google violated antitrust laws through its agreement with AI startup Character.AI, according to a Bloomberg Law report.

Citing sources familiar with the matter, the report stated that antitrust officials are examining whether Google structured the deal in a way that bypassed formal government merger scrutiny.

Last year, Google secured a non-exclusive license to use Character.AI’s large language model technology. As part of the deal, the tech giant also hired Character.AI co-founders Noam Shazeer and Daniel De Freitas—both of whom previously worked at Google.

According to the report, the DOJ can investigate the competitive impact of the agreement even if it did not trigger a formal merger review. The probe remains in its early stages and may not result in enforcement action.

"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."

Google, already facing two antitrust lawsuits from the DOJ—one targeting its search market dominance and the other its digital advertising operations—continues to be under intense regulatory scrutiny.

Earlier this month, the Federal Trade Commission endorsed a DOJ proposal to require Google to share search data with competitors.