Anthropic, an AI startup backed by Google, has cautioned that proposals by the U.S. Justice Department (DOJ) to regulate Google's AI investments could discourage funding for smaller AI firms. In court filings, Anthropic contended that such regulations would stifle competition rather than foster it. The DOJ is seeking remedies to curb Google’s online search monopoly, amid concerns that it could extend its dominance into the AI sector.

Anthropic argued that requiring Google to provide advance notice to the DOJ regarding its proposed AI investments and partnerships would create a "significant disincentive" for Google to invest in smaller AI companies. This could potentially deter such investments altogether. Google currently holds a minority stake, valued in the billions of dollars, in Anthropic.

Judge Amit Mehta is deliberating on methods to promote competition in the online search market, following a ruling in August that Google holds an illegal monopoly. The DOJ and state attorneys general have voiced concerns that Google might extend its dominance to the AI field.

Anthropic asserted that the DOJ's proposals "would harm, not benefit, AI competition." The company emphasized that "Without Google partnerships with and investments in companies like Anthropic, the AI frontier would be dominated by only the largest tech giants - including Google itself - giving application developers and end users fewer alternatives."

Tech industry groups, including Engine Advocacy and TechNet, have aligned with Anthropic on this matter. Antitrust enforcers have requested that Mehta mandate Google to take various actions, such as sharing its search data with competitors, divesting its Chrome browser, and ceasing multibillion-dollar payments to Apple and other companies that set Google as the default search engine on new devices. An earlier DOJ proposal suggested that Google should sell its AI investments.

Google has stated that making its agreements non-exclusive, as it has already begun to do, is the appropriate approach.