Alphabet paces for worst day in a year after AI talent exits

Google is poised to have its worst day on the stock market in a year as artificial intelligence concerns grow and two high-profile researchers have turned to rivals in recent days.

Parent company shares Alphabet It underperformed the rest of both its Nasdaq and megacap peers, losing 7% on Monday morning.

Brain drain concerns began last week. Noam Shazeer, Google’s vice president of engineering and co-lead of Gemini AI models, announced Wednesday that he is leaving the company to join rival OpenAI. Shazeer’s departure comes less than two years after his return to Google.

In August 2024, Google brought Shazeer and fellow researcher Daniel De Freitas back to its DeepMind AI unit as part of a partnership with Character.AI, the startup the duo founded after leaving Google in 2021.

This departure comes weeks after Google announced new AI products at its annual I/O developer conference, including the Gemini 3.5 Flash model and the Gemini Spark AI agent.

Another exit came on Friday when DeepMind vice president and engineering officer John Jumper announced he was leaving the company after nine years for rival Anthropic.

Jumper, who won the Nobel Prize with Google’s Demis Hassabis in 2024, is known as the co-creator of AlphaFold, a groundbreaking artificial intelligence that predicted more than 200 million protein structures, interrupting biological and medical research for years.

The stock decline also came on the heels of Sunday. Wall Street Magazine interview with Microsoft Calling for less dependence on “AI Giants”, CEO Satya Nadella said the AI ​​market has been commoditized.

Alphabet has been spending heavily on artificial intelligence, including raising $141 billion in debt and equity since October. The company is trying to prove that its vertically integrated AI stack can deliver returns.

If models become cheaper and more interchangeable, as Nadella noted in his interview, investors may question whether this spending creates a lasting advantage or simply adds pressure to margins.

On Monday, Google users also reported Gmail and YouTube outages.