By William Gavin
Two AI leaders, including a Nobel laureate, recently said they would leave Google for rival labs
Two artificial-intelligence leaders, including a Nobel laureate, said they would leave Google for rival labs, sparking concerns over the company's ability to compete in the AI race.
Alphabet's stock is heading for its biggest one-day decline in more than a year and a record loss of market capitalization, reflecting investor concerns over the company's recent loss of talent in the artificial-intelligence space.
Hyperscalers vying to lead the AI race are competing for a lot of things, not least of which are talented professionals capable of shaping the development of new technology. In the last week alone, Google parent Alphabet (GOOG) (GOOGL) has lost two high-profile AI leaders.
Noam Shazeer, co-lead of Google's Gemini model, said last week that he was leaving Google DeepMind lab to join ChatGPT-maker OpenAI. His departure came just a few years after he returned to Google from the startup Character.AI as part of a $2.7 billion deal between the companies.
Dig deeper: Google shake-up highlights how human brains may be the scarcest AI resource of all
On Friday, John Jumper, a Nobel Prize winner, also said he would leave Alphabet. His new destination is Anthropic, the developer of the Claude AI model.
Citizens analyst Andrew Boone noted last week that the bear case for Google a few years ago was that it would lose talent to new AI rivals and be unable to catch up on development. Now those fears seem to be rearing their head once more.
The departures are &#34;raising the concern that Google is losing the war for talent at the frontier of AI,&#34; D.A. Davidson managing director Gil Luria told MarketWatch over email. &#34;Google had the state-of-the-art model for a few weeks last year, which helped it get credit as an AI winner, but has fallen off since, and these departures may mean it is falling behind.&#34;
Alphabet's stock is on pace for its largest percent decrease since May 7 of last year, according to Dow Jones Market Data. It's is also on track to lose $269 billion in market value over the course of the session, which would make for its biggest one-day loss ever, according to Dow Jones Market Data. If that holds, it would mark the eighth-largest one-day wipeout of market cap for any U.S. company on record.
Other hyperscaler stocks were seeing weakness as well on Monday. Microsoft's stock (MSFT) was falling after the company announced plans to build a new data-center campus, while Meta Platforms shares (META) were down after a shake-up at WhatsApp.
Separately, Alphabet on Monday said DeepMind would collaborate with film studio and distributor A24 on AI research that could ultimately help with things like movie production. Alphabet said it would also invest in A24, but did not disclose the amount. The Wall Street Journal reported that the investment would be around $75 million.
Hollywood has increasingly been experimenting with AI. Disney (DIS) teamed up with and agreed to invest $1 billion in OpenAI last December - but that deal ended in March. Netflix (NFLX) in March also agreed to buy actor Ben Affleck's AI startup, InterPositive.
-William Gavin
This content was created by MarketWatch, which is operated by Dow Jones &amp; Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
06-22-26 1312ET

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Alphabet faces a $269 billion market-cap wipeout as investors fear it is losing the AI talent war. Two high-profile leaders, including Nobel laureate John Jumper and Gemini co-lead Noam Shazeer, are leaving Google for rivals OpenAI and Anthropic. This exodus has triggered concerns about Alphabet's competitive edge in AI, causing its stock to hit its biggest one-day decline in over a year.

- Two AI leaders, including a Nobel laureate, are leaving Google for rival labs, raising concerns about Alphabet's competitiveness in the AI space.  
- Alphabet's shares experienced a significant drop, with the potential to lose $269 billion in market value, marking a historical one-day loss.  
- Despite talent departures, Alphabet announced a collaboration with A24 for AI research and plans to invest $75 million in the project.

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Alphabet sees $269 billion market-cap wipeout as investors fear it's losing the war for AI talent