Google is facing two very different storylines at the same time. One shows a company thriving in the cloud computing business. The other shows a company struggling to keep its top AI researchers.
Google Cloud grew 82% in the second quarter of this year. That is faster than the cloud businesses at Amazon and Microsoft.
Just days after that report, Google announced a shakeup inside its AI division. Chief scientist Jeff Dean said he is leaving the company after 27 years.
Dean is starting a new company called Discovery Loop. It is backed by Google and will focus on automating machine learning and scientific research.
He is not leaving alone. Fellow Google researchers Sanjay Ghemawat, Oriol Vinyals, and Quoc Le are joining him at the new venture.
Demis Hassabis, who co-founded DeepMind and later sold it to Google, is also changing roles. He will become chairman of DeepMind and take on a new job as Alphabet's chief scientist.
In that new role, Hassabis plans to focus on long term research and the societal effects of advanced AI. He will also spend more time on Isomorphic Labs, a drug discovery company that grew out of DeepMind.
A Wave of Departures
These exits follow a pattern that has been building for months. Noam Shazeer, one of the eight authors of the landmark 2017 transformer paper, left Google for OpenAI in June.
That paper, titled "Attention Is All You Need," laid the groundwork for the generative AI systems used today. With Dean's exit, all eight of its authors have now left Google.
Shortly after Shazeer departed, Nobel laureate John Jumper left DeepMind to join Anthropic. Analysts say many researchers are drawn to smaller labs where they can focus on pure research instead of business goals.
Gil Luria, an analyst at D.A. Davidson, said the researchers leaving Google are not focused on turning AI into a product. He said they want to be part of major scientific breakthroughs, and see startups as the place to do that.
Compute and Priorities
One source of tension inside Google is access to computing power. Some researchers have grown frustrated watching Google Cloud sell its AI chips, called TPUs, to outside companies including Anthropic.
Anthropic's models compete directly with Google's own Gemini system. That has created friction for researchers who want more computing resources for their own projects.
Alphabet CEO Sundar Pichai has said that securing compute for advanced AI research remains the company's top priority. He said Google also has to balance that against demand from cloud customers and its own consumer products.
Koray Kavukcuoglu, DeepMind's technology chief, will now take over daily management of the AI lab. He will also lead development of the next Gemini model going forward.
Some analysts argue that Google does not need the most advanced model to succeed. Dan Niles, founder of Niles Investment Management, said most business uses do not require top tier AI performance.
Alphabet shares fell following the announcement of Dean's departure and Hassabis's new role this week. The stock had been up 16% for the year before the news broke.
