Key insights
- Alphabet's stock experienced a significant drop, shedding $250 billion in market capitalization, following the departure of two key AI researchers to competitors Anthropic and OpenAI. While the market reacted negatively, potentially signaling concerns about Alphabet's AI leadership and future prospects, the author suggests the departures might be financially motivated and that Alphabet could potentially rehire the talent. This event highlights the critical importance of key personnel in the competitive AI landscape and could signal a shift in perceived AI innovation leadership.
Alphabet (GOOG 5.07%) (GOOGL 4.98%) stock tumbled 6% through 11:50 a.m. ET Monday on some bad news from HR:
Apparently, two of the tech giant's biggest AI wizards have jumped ship -- for two of Alphabet's biggest competitors in the AI space.
As Reuters reports today, a senior research scientist and Nobel prize winner from Google DeepMind has announced he is leaving the company to join Anthropic instead. Jumper was best known at Google for co-creating an AI tool called "AlphaFold," which was used to predict over 200 million ways proteins could be structured, potentially creating new medicines and "cutting years off biological and medical research."
If Jumper can come up with such ideas on even a semi-regular basis, the loss could be significant for Alphabet. Worse -- Jumper's not alone in jumping ship. As CNBC points out, just last week, Alphabet also lost Noam Shazeer, a vice president of engineering at Google and co-lead of its Gemini AI models.
Shazeer is leaving to join OpenAI.
These are two valuable employees, now lost to Alphabet, but... are they worth $250 billion combined? Because that's the amount of market capitalization that Alphabet has shed in response to the departures -- and I admit I'm skeptical that any one (or even two) employees leaving the company are worth that much.
Granted, investors may be worrying today that the execs left Alphabet because they think it's a sinking ship, and that Anthropic and OpenAI are where the real AI action is at. Personally, I think it's just as likely Anthropic and OpenAI simply offered them more money.
And if that's the case... Alphabet can always hire them back later on!