☰
The DOJ has eased its stance on Google’s AI investments, citing unintended consequences in the evolving AI space.
Alphabet, Inc. (GOOGL) (GOOG) could get a small reprieve in its anti-trust battle even as a far bigger war looms.
The Department of Justice (DOJ) dropped a proposal to get Alphabet to sell its investments in artificial intelligence (AI) companies, including Sam Altman-led OpenAI and Anthropic.
In a filing with the Columbia District Court on Friday, attorneys representing the Justice Department said the plaintiffs no longer seek the mandatory divestiture of Google.
Since the DOJ submitted its “Initial Proposed Final Judgment (IPFJ)” in November, it found evidence pointing to a “risk that prohibiting Google from owning or acquiring any investment or interest in any search or search text ad rival, search distributor, or rival query-based AI product or ads technology could cause unintended consequences in the evolving AI space.”
However, the federal agency said it remained wary about Alphabet’s use of sizable capital to influence AI companies. Therefore, advance notification is required to permit a review of proposed transactions.
The DOJ remained firm on its call for the divestment of the Chrome browser and a slew of other measures to prevent Alphabet from monopolizing the search business.
“Google’s conduct presents genuine danger to freedom in the marketplace and to robust competition in our economy,” the regulator said. The DOJ attorneys said the core components of the IPFJ remain unchanged.
The IPFJ filed in November required that Google stop making search-related payments to its search distribution partners such as Apple, Inc. (AAPL), divest Chrome on the premise that the browser is a critical search access point through which more than 30% of search inquiries are routed and also a contingent Android divestiture at the election of Google or the court.
A Bloomberg report said last week that representatives for the Google parent met with officials of President Donald Trump’s administration to urge them to back down on the DOJ call to break up the company.
Judge Amit Mehta of the District of Columbia, who is hearing the case, will make a final decision in April.
On Stocktwits, retail sentiment toward Alphabet stock remained ‘neutral’ (45/100), with the muted sentiment accompanied by ‘low’ message volume.
Delving into the final proposals submitted by the DOJ, a bearish watcher said AI search may not save the business.
But another watcher asked fellow retail traders to accumulate at current levels on the premise that Alphabet is the most undervalued “Magnificent Seven” stock.
Alphabet stock ended Friday’s session up 0.88% at $173.86. It has lost over 8% since the start of the year.
For updates and corrections email newsroom[at]stocktwits[dot]com.<
subscribe to Asianet Newsable WhatsApp channel by clicking here.
