Is Google Secretly Restructuring AI Deals to Avoid Regulation Scrutiny

Big Tech continues to attract government attention as the competition in generative AI heats up. This week, Google signed a non-exclusive licensing agreement with the AI chatbot startup Character.ai for its LLM technology, also involving the return of Character.ai's co-founders to Google. Character.ai's investors were informed they would be bought out at a $2.5 billion valuation, an increase from their $1 billion valuation post-Series A funding, but the deal is not classified as an acquisition. This structure could lead to regulatory scrutiny similar to Microsoft's deal with Inflection AI, which faced an initial merger investigation in the U.K. Additionally, Google faces regulatory challenges over maintaining an illegal monopoly in online search, which might add scrutiny to its AI ventures.

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