With all of the negative attention that Google has gotten lately in regards to the NSA spying and government ties, it should seem less of a shock that Google wants to distance itself as much as possible from DARPA, the military defense group for advanced research, also known as Defense Advanced Research Projects Agency. Although Google has previously worked with DARPA in the past and is still linked with the military defense research team, they have no intentions of accepting any further military funding for future research, and just as well because DARPA isn't keen on giving it out. Google now conducts all of its advanced robotics research in their own Google X lab, and has even hired on some of DARPA's employees to help power forward some of their aspirations like the self driving car project. Their X lab is also responsible for research into other projects like Loon, and the smart contact lens.
Although the two research companies still have to work together for at least a year thanks to contractual obligations to DARPA from Google owned robotics companies Boston Dynamics and Schaft, Google wants as little to do with them as possible to avoid any further negative media backlash. Since Google's interests are more in line with the public sector, it makes sense for them to want to keep looking good in the public eye. On the flip side of the coin, DARPA would rather take the money it has for use with its funding budget and give it to startups that don't already have the means to cover their own research expenses.
So why all the friction between the two? Most recently it boils down to the DARPA robotics challenge which Google never signed up for. The issue is that Schaft, which is the Google owned robotics team we talked about above, is the most likely winning candidate for the challenge and they had already received funding from DARPA that amounts to $2.6 million. Boston Dynamics which Google bought last year has a contract to provide its ATLAS robot to the the challenge along with any needed technical support. So both of Google's robotics teams are tied to the challenge which isn't scheduled to have its finals until sometime next year. Google may not want any connection with a group that is primarily used for military research, but for now it looks like they have to play ball.