Anthropic, an AI startup backed by Jeff Bezos’ Amazon.com Inc. (NASDAQ:AMZN), has filed a plea with a federal court to dismiss a U.S. government proposal that would prevent Alphabet Inc.‘s (NASDAQ:GOOGL) (NASDAQ:GOOG) Google from investing in AI startups. The proposal is intended to address Google’s alleged monopolization of the online search market.
What Happened: Anthropic, in a court filing on Friday, argued that the proposed remedy would negatively impact both the company and competition in general.
The proposal, put forth by the Justice Department and a coalition of states, includes significant changes to Google’s operations, such as the forced sale of its Chrome web browser.
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The proposal aims to block Google from purchasing, investing in, or partnering with companies that manage consumer search data, including those developing AI technologies.
Anthropic, which has received around $3 billion in funding from Google, argued in its court filing that the proposed remedy would harm both the company and overall market competition. The AI startup also claimed that a forced sale would unfairly benefit its larger competitors, including OpenAI and Meta Platforms Inc (NASDAQ:META).
The U.S. Federal Trade Commission (FTC) has raised concerns about major tech firms like Google and Microsoft Corp. (NASDAQ:MSFT) investing in AI startups, warning that such deals could lead to data consolidation in key areas such as chip development, model training, and data center infrastructure.
Why It Matters: The U.S. government’s proposal is a part of the ongoing efforts to address Google’s alleged monopolization of the online search and search ad markets.
After the DOJ announced remedies in its antitrust lawsuit against Google, the November decision triggered a significant drop in Alphabet’s market value. Alphabet’s business model is deeply interconnected, with its services benefiting from strong synergies.
In Q3 2024, the company's "Search & Other" segment brought in $49.4 billion, making up 56% of its total quarterly revenue.
These proposed remedies have sparked discussions within the tech industry, with some suggesting that AI startups should consider acquiring Google Chrome, while others, like OpenAI, have explored the idea of developing their own web browsers to challenge Google’s dominance.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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