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People walk near the Google offices on July 04, 2022 in New York City.

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Google‘s parent company Alphabet has stacked its legal team with former Department of Justice employees as it fights two separate antitrust lawsuits from the agency, public profiles show.

Former DOJ employees make up both its in-house team and members of outside counsel firms it employs. The company has hired three former DOJ officials into regulatory roles since May 2022, and one before that in 2021, according to public information including social media profiles. Google also uses four different outside counsel firms loaded with nearly 20 former DOJ officials, many of whom worked in the Antitrust Division at various times.

Such hiring to its internal regulatory team is a reflection of the intense scrutiny Google is facing from governments around the world. It can be a signal that a company anticipates dealing with regulatory challenges in years to come, even if it doesn’t know exactly what form it’ll take yet, according to two former government officials.

“When companies find themselves under intense scrutiny from regulatory authorities, antitrust law or otherwise, they make moves like this,” said Bill Kovacic, a former Federal Trade Commission chair who now teaches antitrust law at George Washington University.

Google now faces two antitrust challenges from the DOJ, both to its search and ad tech businesses, and additional challenges from a slew of state attorneys general. Regulators around the world, including in Europe and Australia, have also presented policy and enforcement hurdles.

Google’s hiring is not surprising for a company under such a microscope, according to Doug Melamed, a former acting assistant attorney general at the DOJ Antitrust Division who’s now a scholar-in-residence at Stanford Law School.

The company had already been fighting one complex antitrust case that would likely require a team of 10 to 15 lawyers alone, according to Melamed, when the Department brought its second antitrust challenge against the company earlier this year.

“They don’t have the capacity to handle a case like that just sitting idle,” Melamed said. “They’ve got to now think about well, what outside lawyers are available that have to have the time and expertise to handle this case? And then, do I have the in-house capability to support it and supervise it?”

The added threat of new legislation targeting Google’s business, and that of other tech firms, looms. In the near term, it appears that a massive lobbying campaign by the industry has successfully delayed the most disruptive reforms. But the possibility of renewed energy around that legislation still hangs over the industry, and a company like Google “can take nothing for granted now,” Kovacic said, adding that’s likely a reason for the company to build out its regulatory forces.

“New entrants and new innovations are driving competition and delivering value for America’s consumers, publishers, and merchants,” a Google spokesperson said in a statement for this story. “We’re proud of our services and we look forward to making our case in court.”

Revolving door hiring

Alphabet now has at least five former DOJ staffers on its legal team, including Google’s director of competition Kevin Yingling, who’s been with the company for more than a decade and worked as a trial attorney at the Department of Justice from 2000 to 2005, according to his LinkedIn.

The company hired Kate Smith as counsel for Alphabet’s regulatory response, investigations and strategy unit in February 2021, according to LinkedIn. Smith was a trial attorney in the DOJ’s Civil Frauds division from September 2015 until January 2021.

In May 2022, according to LinkedIn, Alphabet hired Mike Kass, a former trial attorney in the DOJ’s Civil Fraud section, as its regulatory and litigation counsel for products.

A month later, the company hired Seema Mittal Roper as counsel on its regulatory response team. Mittal Roper worked as an assistant U.S. attorney for the DOJ in Maryland from 2013 to 2018, according to LinkedIn.

Most recently, the company hired Jack Mellyn as strategy counsel on its regulatory team. Mellyn was previously an attorney advisor and then acting assistant chief in the DOJ’s competition policy and advocacy section, according to a previously available social media profile.

It’s not clear which employees are working on the specific matters before the DOJ and Kass’ role appears focused outside of antitrust. It’s likely these employees never worked on Google-related matters they’re dealing with now during their time in government, given their dates and areas of previous employment, as well as federal ethics rules that bar certain conflicts.

But experts say this kind of hiring, which is common among businesses faced with regulatory scrutiny, can still be beneficial to a company because of the unique insight, touch or credibility that an ex-government attorney might hold when it comes to their former colleagues.

“There are lots of lawyers out there. But only alumni of an office really understand how that office works,” said Jeff Hauser, executive director of the Revolving Door Project, which tracks the business ties of executive branch officials. “That means its strengths and weaknesses, that means the tendencies of people in that office. And they can therefore give much more concrete intelligence and better-informed advice to their client.”

Hauser said this may mean the lawyers could advise a client or employer to flood the agency with information rather than comply with a certain document request, knowing that the enforcers don’t have the capacity to deal with it. Or, they might suggest strategies to approach a deposition, knowing the government staffer conducting it.

A lawyer who’s had experience in the government doesn’t bring information about the specific matters of the companies involved, but rather brings a general perspective about how the agency is approaching these kinds of problems,” Melamed said.

Enforcement agencies also often have to trust whether they believe the target of an investigation has complied with its requests. Hauser said the agencies may be more inclined to take the word of their former colleagues, compared to a more removed attorney.

A recent event shows what can happen when that trust is broken. The DOJ last month accused Google of destroying chat messages it should have kept under a litigation hold related to the investigation. The DOJ made the accusation in a legal filing after Epic Games raised the concern in its own antitrust litigation against Google.

A Google spokesperson said in a statement at the time of the DOJ’s filing that they “strongly refute the DOJ’s claims.”

Google also works with outside counsel firms on its antitrust cases, including Axinn, Freshfields, Ropes & Gray and Wilson Sonsini, based on reports, statements and legal filings. Those firms collectively have around 20 former DOJ employees on their staff, many of them working in antitrust. Though these attorneys may not all work on Google matters, the firms themselves often tout the benefit of former government officials in bringing a helpful perspective to clients.

For example, Freshfields says on its website that its “deep bench of former DOJ and FTC trial attorneys gives us unique insight into how the enforcement agencies approach enforcement in general and litigation in particular.”

Kovacic said agency experience is something companies look for in hiring outside firms.

“In deciding who to retain, what law firm to retain or what economic consultancy to retain, they would place a lot of weight on how many former government officials are in those firms,” Kovacic said.

Freshfields attorneys Julie Elmer and Eric Mahr have led Google’s defense against an advertising technology monopolization case brought by a group of states led by Texas, The New York Times reported in 2021. And Bloomberg Law reported this year that Mahr will also lead its defense in the ad tech case brought by the DOJ.

Mahr was director of litigation for the DOJ Antitrust Division from 2015 to 2017, according to the Freshfields site, and Elmer worked as a trial attorney in the Antitrust Division from 2015 to 2020, according to her LinkedIn profile.

Revolving door hiring goes both ways between the public and private sectors, with government officials often working for previous employers or clients who become relevant in their work. For example, DOJ antitrust chief Jonathan Kanter previously worked for clients including Microsoft and Yelp which have complained of Google’s allegedly anticompetitive behavior.

Ultimately, however, Kanter was cleared to work on cases and investigations involving Google, despite the company’s suggestion that his past work should cast doubt on his ability to be fair in such matters.

The DOJ and Wilson Sonsini declined to comment. The three other firms mentioned did not immediately provide a comment for this story.

Limits for former government employees

There are limits on what former government officials can work on under federal ethics and Bar rules.

For example, the DOJ’s website says that former employees can’t represent someone before the government on an issue involving parties they “personally and substantially” worked on during their time in government. For two years after leaving the Department, a former employee also cannot represent anyone before the government in a matter involving parties they know “was pending under his official responsibility for the last year of government service and in which the U.S. is a party or has a substantial interest.”

And for one year after leaving the agency, former senior employees cannot represent someone before the agency “with the intent to influence” the DOJ on a pending matter or one in which it has an interest.

Personal and substantial work on a matter within government doesn’t depend on the length of time devoted to it, but the role a person played in potentially influencing the outcome or direction, according to Virginia Canter, the chief ethics counsel at Citizens for Responsibility and Ethics in Washington (CREW) who previously advised government officials on ethics at agencies including the Securities and Exchange Commission and the Treasury Department.

But even if a former government official can’t work on a specific matter they were privy to during their earlier employment, their insight might still be useful to a company.

“You can read about it, but when you’re actually part of dealing with these cases, you know that there are certain factors that are going to either act as mitigating or … that are going to more favorably incline you to bring a case,” Canter said. “It’s just your general knowledge and experience.”

When companies hire former government officials, they may also have the idea that those employees will be viewed more favorably by the current regime.

“Maybe there’s just this general impression that they’re trying to surround themselves with what will be perceived by their former colleagues as the good guys,” Canter hypothesized.

Some might argue that experience could be beneficial to the government in some cases, Canter noted. A former government employee might have a deeper understanding of the importance of compliance or providing certain information to officials, for example, having seen up close what could be at stake if they don’t.

Hauser said it’s unlikely DOJ leadership, especially Kanter, who has made a point to bring more aggressive cases in the tech space and overall, would be overly swayed to view things Google’s way in ongoing matters. But, he said, the impact of former DOJ staff employed by Google could be more influential in an emerging issue, where there’s an opportunity to leave a first impression on senior leadership about it.

The degree of this kind of influence may be relatively small on the level of an individual case, Hauser said, but for a company under such a high degree of regulatory scrutiny, it could add up.

“You’re talking about billions and billions of dollars of potential implications for Google’s net worth,” Hauser said. “Relatively small changes in the scope of the investigation, the timeframe of the investigation, can be very big, even if they don’t go to the overall question of will there be any lawsuits by the Justice Department against Google.”

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Global investors battle between long- and short-term wins amid Nvidia volatility

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Global investors battle between long- and short-term wins amid Nvidia volatility

Global investors are bracing for a battle between long and short-term wins amid a dramatic sell-off in artificial intelligence-related stocks. 

AI darling Nvidia buoyed an otherwise deflated market when it reported strong earnings after the bell on Wednesday, sending its own stock soaring and carrying related names alongside it. However, the rally quickly reversed on Thursday with Nvidia ultimately ending the trading session 3% lower.  

While the U.S. chipmaker’s earnings initially appeared strong enough to quell concerns over an AI bubble, economic speculation put global investors back on the defensive as hopes dimmed of a December rate cut by the Federal Reserve. The U.K.’s hotly anticipated Autumn Budget is also expected next week.  

Asia-Pacific markets fell Friday, led by tech heavyweight SoftBank, which plunged more than 10%. European stocks followed suit with a negative open. Stateside, however, appetite may have already reversed – again – as futures rose.  

“I think the market is quite confused as to why this is happening,” Ozan Ozkural, founding managing partner at Tanto Capital Partners, told CNBC’s “Squawk Box Europe” on Friday.  

Biggest single-day U.S. stock market swing since April

Market moves this year have been driven by sentiment, momentum, AI and innovation, “with sprinkles of geopolitical risk,” he said. “Although we haven’t got a specific reason why there has been a sell-off on the back of the strong Nvidia results, to me it’s not that surprising, because [it’s] only a matter of time until sentiment just shifts, because we just live in a much more uncertain world.” 

There also doesn’t need to be a catalyst, he added. However, the “most dangerous place we can be at” is a sustained sell-off, even if it’s a slow burn, Ozkural warning, noting that this could lead portfolio managers to lock in gains and cash out.  

Asset managers are driven by compensation cycles which is why they don’t like to hedge their bets, he said. “No one cares about the long term. Everyone is dead in the long term. No one even cares about the medium term. It’s all about short term cycles,” he said.  

“But the reality is, it’s year end, people need to get paid their bonuses, and it doesn’t pay to be bearish unless we see a sustained level of a sell-off.”  

Investors with cash in an AI ETF or index may be cashing out due to a mixture of year-end risk management and continued concerns over an AI bubble. Those who may have made a lot of money on the back of the AI trade will probably want to step back and sell, said Stephen Yiu, investment chief at Blue Whale Growth Fund, which has a position in Nvidia.  

The market is quite confused by sell-off, says Tanto Capital

However, for Julius Bendikas, European head of macro and dynamic asset allocation at Mercer, “it’s the battle between the solid fundamentals and questions being raised about multiples and maybe positioning getting a touch stretched.”

Despite solid fundamentals and earnings exceeding expectations, Bendikas told CNBC’s “Europe Early Edition” that investors are now starting to question whether the price is right and have started to sell as a result.

On technicals, “arguably, a lot of people have rushed into equities,” he said, noting that a recent Bank of America survey found cash levels are low. “So people have been quite long equities, maybe too long equities. And I think what we’ve seen yesterday is the valuations and technicals [narrative] overpowering the fundamental narrative, which came in quite strong post the Nvidia earnings overnight, a day ago.”

Nick Patience, AI lead at The Futurum Group, added: “Investors are also concerned about the circular nature of deals between Nvidia and other ecosystem players, questioning whether massive capital expenditures from hyperscaler customers represent sustainable demand.”

Fed rate cut

The moves may also reflect economic pressure. “The [Thursday] afternoon decline coincided with some negative macroeconomic signals in the form of the delayed September jobs report released in the morning that showed the US economy added 119,000 jobs – more than the expected 50,000 – but the unemployment rate rose to 4.4%, the highest level since October 2021,” Patience said.

The last bit of big news the market is expecting is the Fed’s December rate decision; investors had anticipated a cut but are now split on whether it will happen.  

The central bank opting to not cut rates is “not an issue,” Yiu said, but could lead investors who had expected it to cut, to pause and recalibrate ahead of next year.  

“I think people just want to probably lock in and derisk, and take a break from [President Donald] Trump as well, who knows what Trump is going to next,” he added.  

Amid the hype, it’s difficult to work out the AI winners and losers, Yiu said, but he expects a differentiation between the companies investing in AI and those on the receiving end of that cash, which he called AI infrastructure. As the market shakes out, Yiu is placing his bets on the latter.  

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Foxconn highlights growing AI ambitions at ‘Tech Day’ as it grows beyond iPhone assembler identity

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Foxconn highlights growing AI ambitions at 'Tech Day' as it grows beyond iPhone assembler identity

The entrance to a Foxconn construction site in Mount Pleasant, Wisconsin, in May 2019.

Katie Tarasov | CNBC

Foxconn showcased its push into artificial intelligence at its annual ‘Hon Hai Tech Day’ in Taiwan on Friday, underscoring the world’s largest contract manufacturer’s efforts to evolve beyond its role as the biggest assembler of Apple’s iPhones. 

The company, officially known as Hon Hai Precision Industry Co., has also become a major player in the AI hardware space, with its event taking place the same day it announced a partnership with ChatGPT maker OpenAI. 

OpenAI CEO Sam Altman, in a video statement streamed at the event, said that the two firms would “share insight into emerging hardware needs across the AI industry.”

He added that Foxconn would use those insights to design and prototype new equipment that could be manufactured in the United States.

The partnership will center on Foxconn’s server business, which earlier this year became its largest revenue driver and helped drive record profit in the September quarter.

Describing Foxconn and OpenAI as “natural partners,” Kirk Yang, an adjunct finance professor at National Taiwan University, told CNBC, “OpenAI needs strong partners, not only to manufacture products, but to quickly introduce all the products to the market.”

“So I think it makes perfect sense for OpenAI to work with Foxconn. And Foxconn is probably the strongest partner that open AI can find,” he added.

Hon Hai shows off AI capabilities at Tech Day

Foxconn also announced a partnership with Intrinsic, a unit of Alphabet to build so-called “artificial intelligence factories.” 

The Taiwanese manufacturer highlighted deeper work with Nvidia as well, showcasing its compute trays for the chip designer’s cutting-edge Blackwell chips.

Speaking at the Friday event, Alexis Bjorlin, vice president and general manager of Nvidia’s DGX Cloud unit, said the partners would work on deploying advanced AI infrastructure much faster to meet customer demand.

AI hardware orders have surged this year, with Nvidia beating third-quarter expectations on Wednesday and providing a strong forecast for the current quarter.

Despite Nvidia’s results showing that demand for AI hardware remains strong, concerns persist in the market about a potential AI bubble and the sustainability of heavy AI spending. 

Speaking to CNBC’s Emily Chan on the sidelines of Hon Hai Tech Day, Foxconn Chairman Young Liu expressed confidence that the company would be protected from a potential AI bubble.

“No matter what [AI] models or [AI] model players will win, they all need hardware, and no matter what GPU player will win, they all need system and component suppliers to support them,” he said.

— CNBC’s Emily Chan contributed to this report

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SoftBank sinks over 10% as Nvidia-fueled rout sweeps Asian chip names

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SoftBank sinks over 10% as Nvidia-fueled rout sweeps Asian chip names

The logo of Japanese company SoftBank Group is seen outside the company’s headquarters in Tokyo on January 22, 2025. 

Kazuhiro Nogi | Afp | Getty Images

A sector-wide pullback hit Asian chip stocks Friday, led by a steep decline in SoftBank, after Nvidia‘s sharp drop overnight defied its stronger-than-expected earnings and bullish outlook.

SoftBank plunged more than 10% in Tokyo. The Japanese tech conglomerate recently offloaded its Nvidia shares but still controls British semiconductor company Arm, which supplies Nvidia with chip architecture and designs.

SoftBank is also involved in a number of AI ventures that use Nvidia’s technology, including the $500 billion Stargate project for data centers in the U.S.

South Korea’s SK Hynix fell nearly 10%. The memory chip maker is Nvidia’s top supplier of high-bandwidth memory used in AI applications. Samsung Electronics, a rival that also supplies Nvidia with memory, fell over 5%. 

Taiwan Semiconductor Manufacturing Company, the world’s largest contract chipmaker and manufacturer of Nvidia’s chip designs, was down over 4% in Taipei. 

Taiwan’s Hon Hai Precision Industry, also known as Foxconn, which manufactures server racks designed for AI workloads, dipped 4%.

The retreat in major Asian semiconductor giants comes after Nvidia fell over 3% in the U.S. on Thursday, despite beating Wall Street expectations in its third-quarter earnings the night before. 

The company also provided stronger-than-expected fourth-quarter sales guidance, which analysts said could lift earnings expectations across the sector. 

However, smaller chip players in Asia were not spared either.

In Tokyo, Renesas Electronics, a key Nvidia supplier, fell 2.3%. Tokyo Electron, which provides essential chipmaking equipment to foundries that manufacture Nvidia’s chips, was down 5.32%. 

Another Japanese chip equipment maker, Lasertec, was down over 3.5%.

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