Court ban on Google AI stakes would hurt Anthropic clients, say analysts

Anthropic has asked a US court for permission to intervene in the remedy phase of an antitrust case against Google, arguing that the US government’s call for a ban on Google investing in AI developers could hurt it.

Analysts suggest the AI startup’s fears are founded, and that it risks losing customers if the government’s proposal is adopted.

“Its enterprise clients might face uncertainties regarding the continuity of services and support, potentially affecting their operations,” said Charlie Dai, principal analyst at Forrester.

The government’s proposed remedies including the ban on AI investments after the US District Court for the District of Columbia found the search giant guilty of maintaining a monopoly in online search and text advertising markets in August 2024.

The proposed investment ban is aimed at stopping Google from gaining control over products that deal with or control consumer search information, and in addition to preventing further investment in any AI startup would also force it to sell stakes it currently holds, including the $3 billion one in Anthropic.

On Friday, Anthropic filed a request to participate in the remedy phase of the trial as an amicus curiæ or friend of the court.

“A forced, expedited sale of Google’s stake in Anthropic could depress Anthropic’s market value and hinder Anthropic’s ability to raise the capital needed to fund its operations in the future, seriously impacting Anthropic’s ability to develop new products and remain competitive in the tight race at the AI frontier,” the AI startup said in a court filing justifying the request.

It said it had contacted representatives for the plaintiffs in the case — the US government and several US states — seeking to influence the proposal.

Remedy wouldn’t just affect Google

While Anthropic’s primary concern is that the proposed investment ban could hurt the value of the company, it is also worried that it could put it on the back foot against rivals.

“This would provide an unjustified windfall to Anthropic’s much larger competitors in the AI space —including OpenAI, Meta, and ironically Google itself, which (through its DeepMind subsidiary) markets an AI language model, Gemini, that directly competes with Anthropic’s Claude line of products,” the company said in the filing.

Abhivyakti Sengar, senior analyst at Everest Group also shares Anthropic’s view on the effect of the proposed ban.

“Forcing Google to sell its stake in Anthropic throws a wrench into one of the AI industry’s most significant partnerships,” Sengar said, adding that while it might not cause an immediate loss of customers, any disruption to the performance or reliability of Anthropic’s models or its innovation speed could drive business towards its rivals.

The AI startup, additionally, tried to differentiate itself with rivals, such as OpenAI, by pointing out that unlike its competitors it is not owned or dominated by a single technology giant.

“While both Amazon and Google have invested in Anthropic, neither company exercises control over Anthropic. Google, in particular, owns a minority of the company and it has no voting rights, board seats, or even board observer rights,” it said in the filing.

Further, it said that Google doesn’t have any exclusive rights to any of its products despite investing nearly $3 billion since 2022 in two forms, direct equity purchase and purchases of debt instruments that can be converted into equity.

AI was “never part of the case”

Among the arguments that Anthropic makes against the proposed remedy, it notes that neither it nor Google’s other AI investments were ever a part of the case.

“Neither complaint alleged any anticompetitive conduct related to AI, and neither mentioned Anthropic. The only mention of AI in either complaint was a passing reference in the US Plaintiffs’ complaint to AI ‘voice assistants’ as one of several ‘access points’ through which mobile-device users could access Google’s search services,” it said in the filing.

In addition, it claimed that forcing Google to sell its stake could diminish Anthropic’s “ability to fund its operations and potentially depress its market value” as alternative investors deal in millions and not the billions Google invested.

“Forcing Google to sell its entire existing stake in Anthropic within a short period of time would flood the market, sating investors who would otherwise fund Anthropic in the future,” it said in the filing.

Analysts too warned that the future of Anthropic’s operations and its ability to retain customers will depend on the startup’s ability to secure investment if the proposal is adopted.

That, said Everest’s Sengar, “will determine whether it will be a setback or an opportunity for greater independence in the AI race.”

Forrester’s Dai agreed, adding that if Anthropic can quickly reassure its customers and demonstrate a clear plan for continuity and innovation, it may retain their trust and loyalty.