AI veteran Jeff Dean leaves after 27 years, founding a new company with three top scientists. Alphabet (GOOGL.US) shares plummet over 4%.

Alphabet Inc. Class C's parent company Alphabet (GOOGL.US, GOOG.US) announced a major leadership restructuring for its AI business on Wednesday. Demis Hassabis, CEO of Alphabet Inc. Class C DeepMind and a Nobel Prize winner, will step down from daily management duties to transition to the newly established position of Chief Scientist at Alphabet and Chairman of Alphabet Inc. Class C DeepMind. Meanwhile, influential AI veterans such as Jeff Dean are leaving to start new ventures, creating a new AI company named Discovery Loop. This personnel adjustment comes at a critical time for Alphabet Inc. Class C's AI strategy. Concerns have been growing that Alphabet Inc. Class C may be lagging behind Anthropic and OpenAI in the generative AI field, particularly since the latest version of their flagship AI model Gemini was not released as planned in June. Following the announcement, Alphabet's stock price fell over 4% on Wednesday. Hassabis steps down from daily management to focus on long-term AGI research According to an internal memo from Alphabet CEO Sundar Pichai, Hassabis will become the new Chief Scientist of Alphabet and will also serve as Chairman of Alphabet Inc. Class C DeepMind, no longer handling day-to-day operations. Pichai noted that he has long discussed with Hassabis how to allow him to focus more on shaping the future of Artificial General Intelligence (AGI). He stated, The development of AGI is crucial for Alphabet and for humanity as a whole; I cant think of anyone better suited for this mission than Demis. Hassabis himself indicated in a letter to employees that as AGI inches closer to reality, now is the best time for him to devote more time to long-term scientific research. According to company arrangements, he will focus on the direction of AGI development and its long-term impact on society, while the team he directly oversees will be significantly reduced. Daily operations of Alphabet Inc. Class C DeepMind will be taken over by the CTO With Hassabis exiting daily management, Koray Kavukcuoglu, Chief Technology Officer of Alphabet Inc. Class C DeepMind, will fully assume operational responsibilities for the AI department. Koray will be promoted to Senior Vice President of Alphabet Inc. Class C DeepMind while continuing as Alphabet's Chief AI Architect, responsible for the research and development of the Gemini series models and product advancement. Notably, the company did not reinstate a CEO position but instead adopted a senior vice president structure. According to media reports citing informed sources, the leadership within Alphabet Inc. Class C Cloud has generally welcomed Koray's appointment. Compared to Hassabis, who has a stronger focus on fundamental research, Koray has been deeply involved in numerous collaborations between Alphabet Inc. Class C DeepMind and Alphabet Inc. Class C Cloud, making it likely that his leadership will drive Gemini to focus more on commercialization and the actual implementation of products, accelerating the transformation of AI technology into cloud computing services. Gemini's release delayed, competitive pressure continues to rise This restructuring takes place as Alphabet Inc. Class C DeepMind faces its biggest competitive pressures in recent years. The latest version of the flagship Gemini, originally slated for release in June, has yet to officially launch, raising concerns in the market about whether Alphabet Inc. Class C is falling further behind Anthropic and OpenAI. This summer, both competing firms also recruited heavyweight AI talent from Alphabet Inc. Class C. During the Google I/O developer conference in May, Alphabet management emphasized that Gemini has lower inference costs instead of asserting that its model capabilities had reached industry-leading levels, which was interpreted by some market observers as a shift in Alphabet Inc. Class C's current competitive strategy. AI veterans Jeff Dean and others start a new venture, forming Discovery Loop Another aspect of this restructuring that has attracted market attention is the collective departure of several core AI figures from Alphabet Inc. Class C to start their own venture. Jeff Dean, Sanjay Ghemawat, Oriol Vinyals, and Quoc Le have co-founded an AI startup called Discovery Loop. The new company will operate as a public-benefit corporation, focusing on breakthrough technologies in machine learning, scientific research, and engineering. Google has indicated it will invest in Discovery Loop, while Alphabet Inc. Class C Cloud will also provide cloud computing resources to support it. Jeff Dean later confirmed on the X platform that the new company will focus on leveraging AI to drive scientific discoveries and engineering innovations. Jeff Dean was a founder of Google Brain, laying the groundwork for Alphabet Inc. Class C's AI alongside Hassabis. Jeff Dean has long been seen as one of the most representative figures in the Alphabet Inc. Class C AI system. In 2011, he founded Google Brain, which, alongside DeepMind led by Hassabis, has long represented the two major AI research systems in the U.S. and the U.K. In 2023, following the emergence of ChatGPT, Google announced the official merger of Google Brain and DeepMind into Alphabet Inc. Class C DeepMind. At that time, Hassabis assumed the role of CEO, while Jeff Dean became Chief Scientist. Previously, Dean, Oriol Vinyals, and Noam Shazeer were jointly responsible for the development of the Gemini model. The Gemini 3 released last November was widely viewed as having significantly narrowed the gap with OpenAI and Anthropic. However, the competitive landscape has shifted again this year. Noam Shazeer left Alphabet Inc. Class C to join OpenAI in June, while John Jumper, who will share the Nobel Prize with Hassabis in 2024, also announced his addition to Anthropic, demonstrating a continued talent drain from Alphabet Inc. Class C's AI team. Additionally, Vinyals, Quoc Le, and OpenAI co-founder Ilya Sutskever collaborated on a seminal paper in 2014 that introduced the concept of using Beijing Vastdata Technology for pre-training, which is widely considered to have laid the foundation for the development of modern large language models. Analysts: While Alphabet Inc. Class C has a strong talent pool, the loss of core talents will still have an impact Regarding this restructuring, Brian Mulberry, Chief Market Strategist at Zacks Investment Management, noted that although Alphabet Inc. Class C still possesses one of the industry's strongest talent reserves, the simultaneous departure of four key AI figures, including Jeff Dean, will have a short-term impact on the company. He stated, Alphabet Inc. Class C has a deep talent pool, but the loss of these four core figures will still leave a noticeable effect. It is inherently difficult to regain the speed of innovation and execution, and the departure of key contributors will only make this process more challenging. Overall, this AI business restructuring reflects Alphabet's attempt to find a new balance between cutting-edge fundamental research and AI commercialization. On one hand, the company aims for Hassabis to focus on promoting long-term research directions such as AGI; on the other hand, it has assigned the more product-oriented Koray Kavukcuoglu to take over the daily operations of Alphabet Inc. Class C DeepMind, accelerating Gemini's commercial rollout in response to the ongoing pressures from OpenAI, Anthropic, and other competitors.