U.S. Abandons Push for Google to Divest AI Stakes in Antitrust Suit

Focus Shifts to Chrome Sale and Search Monopoly Remedies / Broomberg

The U.S. Department of Justice has stepped back from its earlier plan to compel Alphabet’s Google to offload its artificial intelligence investments, such as its substantial stake in Anthropic, as part of a high-profile antitrust lawsuit targeting Google’s dominance in online search. This decision marks a significant pivot in the government’s strategy to address what a federal judge has ruled as Google’s unlawful monopoly in the search engine market. While the proposal to divest AI holdings has been shelved, the DOJ continues to pursue a court order mandating Google to sell its Chrome browser and adopt additional measures to foster competition in the digital search landscape. This development reflects a nuanced approach to antitrust enforcement, balancing the need to curb monopolistic practices with the preservation of innovation in the rapidly evolving AI sector.

Google’s investments in AI companies, particularly its multibillion-dollar stake in Anthropic, a rival to OpenAI, had been a focal point in the DOJ’s initial recommendations. The government had argued that forcing Google to divest these assets could prevent the tech giant from extending its search dominance into the burgeoning field of generative AI technology. However, Anthropic countered this in a February court filing, asserting that such a move would inadvertently bolster competitors like OpenAI and its ally Microsoft, potentially skewing the competitive dynamics of the AI industry. The DOJ’s latest filing, which emerged on a Friday, instead emphasizes requiring Google to notify the government of future generative AI investments, a less drastic measure aimed at monitoring rather than dismantling Google’s AI strategy. This shift suggests a recognition of the complex interplay between antitrust remedies and the broader implications for technological advancement and market competition.

The antitrust case itself stems from a landmark ruling in August 2024, where U.S. District Judge Amit Mehta determined that Google had illegally maintained its search engine monopoly through exclusive agreements with companies like Apple, ensuring Google remained the default search option on countless devices worldwide. These deals, which funneled billions in revenue to partners, effectively sidelined competitors by limiting their access to the vast troves of search data needed to refine their offerings. In response, the DOJ’s original November proposal sought sweeping changes, including the sale of AI investments and structural separations like divestitures. However, the refined approach now centers on Google’s Chrome browser, a key gateway to its search engine, which commands a dominant share of the global browser market. Selling Chrome could disrupt Google’s ability to steer users toward its search platform, potentially opening the door for rival search engines to gain traction.

Google, for its part, has vowed to appeal the judge’s ruling and has put forward its own remedy plan, proposing to relax the restrictive search distribution agreements with partners like Apple. This would allow greater flexibility for device manufacturers to choose alternative default search engines, a move Google frames as a sufficient step to restore competition without fracturing its business model. The company’s stake in Anthropic, valued at billions, remains a critical asset in its AI arsenal, supporting advancements in Google Cloud and search capabilities, as highlighted by CEO Sundar Pichai in late 2024 remarks about the lucrative returns on AI investments. Preserving this stake ensures Google can continue to compete head-on with Microsoft and OpenAI in the AI race, a priority underscored by its $2 billion investment in Anthropic in 2023, which has since grown in valuation.

The decision to drop the AI divestiture demand also carries broader implications for the tech ecosystem. Forcing Google to sell its AI holdings could have reshaped the competitive landscape, potentially benefiting Microsoft, which has deep ties with OpenAI, and weakening Anthropic’s position as an independent player backed by Google and Amazon. The DOJ’s revised stance avoids this scenario, maintaining a delicate balance in an industry where Big Tech’s financial support fuels AI innovation. Meanwhile, the focus on Chrome’s sale keeps the spotlight on Google’s search practices, addressing the core issue of the monopoly ruling. With Chrome holding over 70 percent of the browser market, its divestiture could significantly alter how users access search engines, possibly amplifying the visibility of alternatives like Bing or DuckDuckGo.

As the case progresses toward an April 2025 trial, both sides are gearing up to present their arguments before Judge Mehta. The DOJ’s push for structural changes, including the Chrome sale and oversight of future AI investments, aims to dismantle the mechanisms that have entrenched Google’s search dominance. Google’s counterproposal, centered on modifying distribution deals, seeks to mitigate these concerns without sacrificing its integrated ecosystem. The outcome of this legal battle will likely set a precedent for how antitrust law navigates the intersection of traditional market power and cutting-edge technology. For now, Google retains its AI investments, a win for its long-term strategy, while facing the looming possibility of losing a cornerstone of its search infrastructure. This evolving saga underscores the intricate challenge of regulating tech giants in an era where search engines and artificial intelligence are increasingly intertwined, shaping the digital experiences of billions.