Alphabet shares fell 4 per cent after Google announced a major AI leadership shake-up, with DeepMind chief Demis Hassabis moving into a new role and several senior Gemini leaders departing, raising fresh concerns over Gemini delays and Google’s position in the AI race
Shares of Google parent Alphabet fell 4 per cent on Wednesday after the company announced a sweeping leadership shake-up at its artificial intelligence division, fuelling investor concerns over delays to its flagship Gemini AI model and mounting competitive pressure from rivals OpenAI and Anthropic.
The restructuring marks one of the biggest management changes at Google DeepMind since the company merged its AI research teams in 2023. It comes at a critical time, with the latest version of Gemini still unreleased despite an earlier target of launching in June.
The delay has heightened concerns on Wall Street that Google risks losing further ground in the fast-moving AI race, even as competitors continue to roll out more advanced models and attract top talent from the company.
Demis Hassabis shifts to chief scientist role
Alphabet said Nobel Prize-winning AI researcher Demis Hassabis will step down from his day-to-day management role as chief executive of Google DeepMind to become Alphabet’s newly created chief scientist.
In a memo to employees, Hassabis said the transition would allow him to focus on shaping the future of artificial general intelligence (AGI) — AI systems capable of matching or exceeding human cognitive abilities across a wide range of tasks.
Alphabet CEO Sundar Pichai said the move had been under discussion for some time.
More from Business“Demis and I have been long discussing a role that allows him to put his full attention on actively shaping the future of AGI,” Pichai wrote in a company-wide memo. “It’s work that is vitally important to Alphabet and humanity.”
Koray Kavukcuoglu, currently DeepMind’s chief technology officer and Alphabet’s chief AI architect, will take over day-to-day leadership of the AI division as senior vice president.
Senior Gemini leaders leave Google
The overhaul also coincided with the departure of several of Google’s best-known AI researchers.
Veteran engineer Jeff Dean, along with Sanjay Ghemawat, Oriol Vinyals and Quoc Le, has left the company to launch a new startup called Discovery Loop, which will focus on machine learning, scientific research and engineering. The company will operate as a public benefit corporation.
Alphabet did not explain the timing of the departures or whether they were linked to the leadership reshuffle.
The exits add to a growing list of high-profile AI talent leaving Google. Earlier this summer, senior researcher Noam Shazeer departed for OpenAI, while Nobel laureate John Jumper announced he would join Anthropic.
Gemini delays worry investors
The leadership changes come as Google faces increasing scrutiny over the pace of Gemini’s development.
While Gemini 3, released last November, was widely viewed as narrowing the technology gap with OpenAI and Anthropic, subsequent advances by rivals — along with the rapid rise of lower-cost open-source AI models from China — have once again put Google on the defensive.
At Google’s developer conference in May, executives highlighted Gemini’s cost efficiency rather than claiming leadership in AI capabilities, a shift many analysts interpreted as a sign that the company was prioritising commercial deployment over technological supremacy.
The unreleased Gemini 4 upgrade has become a key focus for investors eager to see Google regain momentum in the AI race.
Talent exodus clouds Google’s AI ambitions
The latest departures represent a significant loss of institutional expertise for Google.
Jeff Dean co-founded Google Brain in 2011 and has long been regarded as one of the company’s most influential engineers. Vinyals, Le and former OpenAI chief scientist Ilya Sutskever co-authored the landmark 2014 research paper that laid the foundation for today’s large language models.
Brian Mulberry, chief market strategist at Zacks Investment Management, said Google’s deep talent pool would help cushion the impact, but warned that replacing such influential researchers would take time.
“Google has a deep bench of talent but losing these four individuals will leave a mark for some time,” Mulberry told Reuters. “Getting innovation and execution back online is not going to be easy and losing key contributors won’t make it any better.”
Discovery Loop has already secured investment from Google and entered into a cloud partnership with Alphabet, indicating that the relationship between the two companies will remain close despite the high-profile departures.
With inputs from agencies.
