Concerns within the artificial intelligence sector are intensifying, and Alphabet (GOOGL) is facing its most severe single-day stock performance in a year following the departure of two prominent researchers to rival firms.
The share price of Google's parent company, Alphabet, fell as much as 7% intraday, underperforming the Nasdaq index and other major technology giants.
Apprehension over a "brain drain" began last Wednesday when Noam Shazeer, a Google engineering vice president and co-lead of the Gemini AI model, announced his departure from the company to join competitor OpenAI. This move comes less than two years after his return to Google.
In August 2024, Google rehired Shazeer and his colleague Daniel DeFreitas to its DeepMind AI unit through a partnership with the startup Character.AI. Both individuals had previously left Google in 2021 to found Character.AI.
Shazeer's exit follows by just weeks the company's annual I/O developer conference, where new AI products including the Gemini 3.5 Flash model and Gemini Spark AI agent were unveiled.
A second high-profile departure occurred on Friday, as DeepMind vice president and engineering fellow John Jumper announced that after nine years with the company, he would be leaving to join rival Anthropic.
Jumper, who jointly received the Nobel Prize in 2024 with Google's Demis Hassabis, is best known for co-creating AlphaFold. This groundbreaking AI technology has successfully predicted the structures of over 200 million proteins, accelerating biological and medical research by years.
The stock decline also comes in the wake of an interview on Sunday with Microsoft (MSFT) CEO Satya Nadella. Nadella called for reduced reliance on "AI giants" and suggested the AI market is moving towards "commoditization."
Alphabet has been making substantial investments in AI, raising $141 billion through debt and equity since October. The company is attempting to demonstrate that its vertically integrated AI technology stack can deliver returns.
As Nadella pointed out in the interview, if AI models become cheaper and more easily replaceable, investors may question whether these enormous expenditures are building a lasting competitive advantage or merely putting pressure on profit margins.
Separately, on Monday, some Google users reported service disruptions affecting Gmail and YouTube.
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