--- title: "Google AI faces \"a tale of two extremes\": cloud business surges 82%, top scientists leaving raises concerns over cutting-edge research" type: "News" locale: "en" url: "https://longbridge.com/en/news/295079407.md" description: "Google's AI business presents a \"tale of two cities\": cloud business revenue soared by 82%, showcasing its enterprise-level AI sales capabilities; meanwhile, the departure of Chief Scientist Jeff Dean and changes in DeepMind's CEO have raised market concerns about the sustainability of cutting-edge research and development. Despite the full-stack AI layout driving stock prices up, expectations of massive capital expenditures and the loss of core talent have put recent pressure on stock prices, highlighting Google's strategic dilemma in balancing short-term profitability with long-term R&D investment" datetime: "2026-08-06T08:56:02.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/295079407.md) - [en](https://longbridge.com/en/news/295079407.md) - [zh-HK](https://longbridge.com/zh-HK/news/295079407.md) --- # Google AI faces "a tale of two extremes": cloud business surges 82%, top scientists leaving raises concerns over cutting-edge research According to Zhitong Finance APP, in the past two weeks, Google's "ice and fire" pattern in the field of artificial intelligence has been vividly displayed. On one hand, cloud business revenue surged by 82%, while on the other hand, Chief Scientist Jeff Dean announced his departure after 27 years of service. For this technology giant, which laid the foundation for generative AI with the 2017 Transformer paper and now has a market value of $4 trillion, recent events highlight its core strategic dilemma: where to invest money? Building cutting-edge models requires significant upfront costs in computing power and research and development, with uncertain future returns; meanwhile, the cloud business has proven to be efficient and growing much faster than similar services from Amazon and Microsoft. Alphabet CEO Sundar Pichai stated in last month's earnings call that 90% of Fortune 100 companies are using Gemini Enterprise, which fully demonstrates Google's ability to sell AI services to enterprise customers. Tomasz Tunguz, founder of venture capital firm Theory Ventures, pointed out that meeting the needs of most enterprises does not require top-tier models. "I believe that in the field of AI, especially in many white-collar work scenarios, many models with acceptable performance are sufficient," Tunguz said. "Next-generation models may be more used in specific areas that require high-performance computing." Google's full-stack AI layout has been an important driver for its stock price, which has risen 16% this year (up 65% in 2025, outperforming all tech giants). However, recent trends have been somewhat bumpy: after the latest earnings report was released, Alphabet's stock price came under pressure due to market concerns about capital expenditures; on Wednesday, news of Dean's departure and Demis Hassabis stepping down as CEO of Google DeepMind to become chairman further pushed the stock price down. Although Wall Street's overall attitude is relatively positive, not everyone within Google is thrilled. According to several unnamed insiders, some researchers are increasingly dissatisfied with the acquisition of computing power—they find it difficult to obtain the computational resources needed to advance cutting-edge projects while seeing Google sell its self-developed TPU (Tensor Processing Unit, competing with NVIDIA GPUs) to external clients, including Anthropic. In addition, Google's internal approval processes are cumbersome, and the transformation of research results into products requires multiple approvals, making OpenAI, Anthropic, and even younger startups more attractive to AI researchers—they prefer lab work over financial report numbers. Dean, along with senior Google experts Sanjay Ghemawat, Oriol Vinyals, and Quoc Le, has left to establish Discovery Loop. Dean stated on the X platform that this startup, funded by Google, will position itself as a public benefit company, "with the mission to automate machine learning, science, and engineering, accelerating discovery and progress." Several well-known researchers have previously left, including Noam Shazeer, one of the authors of the milestone paper "Attention Is All You Need" published in 2017—this paper laid the foundation for generative AI, and now all eight authors have left Google. Shazeer joined OpenAI in June this year, less than two years after Google recalled him through "acquisition-style hiring" for nearly $3 billion. Shortly after his departure, Nobel laureate John Jumper also left DeepMind to join Anthropic. ## "Becoming Part of History" D.A. Davidson analyst Gil Luria pointed out that the trend of top talent leaving is evident. "They are not keen on commercializing AI but want to be part of history," Luria (who recommends holding Alphabet stock) said, "Therefore, they view Anthropic, OpenAI, or other startups as places where they can write history." At Google, Dean is one of the few executives who dared to publicly criticize the Trump administration. Earlier this year, he strongly opposed the Pentagon's decision to list Anthropic as a supply chain risk, warning that this move could harm the overall interests of the U.S. AI industry. From a technical perspective, he built the computational infrastructure and neural network systems that underpin Google's modern AI leadership. Hassabis co-founded DeepMind in 2010 and sold it to Google four years later. He will transition to the role of chairman of the department and serve as Alphabet's newly established chief scientist, focusing on the long-term research and societal impacts of artificial general intelligence (AGI), while planning to spend more time on Isomorphic Labs, an AI drug discovery company incubated by DeepMind. DeepMind's technical head and Alphabet's chief AI architect, Koray Kavukcuoglu, will take over the daily management of the department and the development of the next-generation Gemini model. According to sources close to the DeepMind team, Kavukcuoglu has gradually taken on more responsibilities that were previously Hassabis's, including guiding model development and overseeing major Gemini releases; Hassabis has spent more time away from the lab, focusing on regulation and the long-term impacts of advanced AI. ## The Biggest Internal Friction Point: Computational Resource Allocation Google's investment in global data centers, chips, and related infrastructure is unmatched, yet computational resources remain scarce. Each TPU allocated for training models, supporting Google products, or fulfilling cloud customer contracts represents a choice among multiple priorities. Insiders say that when Google announced large-scale infrastructure commitments to competing labs like Anthropic (whose models directly compete with Gemini), researchers expressed strong dissatisfaction with access to computational resources. One individual noted that Google has long-term forecasts for different areas, including research, model training, search, and products like Gemini, as well as cloud customer collaborations, which are modeled years in advance. However, if the growth rate of a particular product exceeds expectations or priorities shift, short-term adjustments to computational resource allocation may occur Sundar Pichai emphasized in the last two earnings call meetings that even with the growth in cloud customer demand, Google still prioritizes the computing power needs of DeepMind. When asked about TPU allocation in July this year, he stated that the "top priority" is to ensure computing power to maintain a competitive edge in the AGI frontier, calling this work "the foundation of all our businesses." He also added that Google would balance the aforementioned needs with the computing power required for consumer products and AI models, and alleviate external demand by deploying TPUs directly in third-party data centers. Google shareholder and Niles Investment Management founder Dan Niles believes that the allocation of computing power is inherently contradictory. "Google has all these other businesses, and they have to decide who to allocate resources to," Niles said, "In this situation, someone is always going to be unhappy." ## DeepMind and Cloud Business Accelerate Integration At the World Economic Forum in Davos this January, Demis Hassabis shared the stage with Google Cloud CEO Thomas Kurian to discuss enterprise-level products and application scenarios. According to a person familiar with Google Cloud operations, this scene is quite rare—historically, the two organizations have long operated independently, and Hassabis has been distanced from other company businesses. This person believes that the joint appearance marks Hassabis's more active involvement in AI enterprise use cases (especially in programming, customer service, and other fields), and reflects Google's overall strategy to accelerate the deep integration of research and commercial operations in the face of competitive pressure from OpenAI and Anthropic. In the following months, Google’s models faced several setbacks, the most notable being the delay in the release of the latest flagship model, Gemini 3.5 Pro. Meanwhile, the cloud business under Kurian recorded explosive growth, achieving record-breaking results. Kurian, a former Oracle executive, has led Google Cloud since 2019, building an active enterprise sales organization within a company that excels in consumer internet. Google Cloud designs its own AI chips, operates a global network of data centers, and sells models, databases, security software, and AI agent development tools. This strategy allows Google to profit from AI demand in multiple dimensions: selling infrastructure to labs like OpenAI and Anthropic, while providing Gemini to enterprises and integrating AI into its own products like Search, YouTube, Workspace, and others. The generative AI boom has continued for nearly four years, and a new question emerging today is: Does Google need to develop the top-tier AI models itself? Or would it be wiser to let other companies bear the high costs while it reaps the benefits? Kavukcuoglu stated in May at the Google Developer Conference to CNBC that the company focuses on efficiency while pushing the frontier. He mentioned that the Flash model provides cutting-edge capabilities while being four times faster and more efficient than similar models, allowing Google to extend advanced AI to enterprise and consumer services. Similar to Turing, Niles believes that most business scenarios do not require the strongest models. "Existing models can meet 90% of regular needs," he said, "You don't need a Ferrari; a Ford is enough." However, for scientists and researchers dedicated to achieving the next Transformer-level breakthrough, "good enough" is often far from sufficient ### Related Stocks - [GOOG.US](https://longbridge.com/en/quote/GOOG.US.md) - [GOOGL.US](https://longbridge.com/en/quote/GOOGL.US.md) - [GOOW.US](https://longbridge.com/en/quote/GOOW.US.md) - [GGLS.US](https://longbridge.com/en/quote/GGLS.US.md) - [GGLL.US](https://longbridge.com/en/quote/GGLL.US.md) - [GOOY.US](https://longbridge.com/en/quote/GOOY.US.md) - [GOU.US](https://longbridge.com/en/quote/GOU.US.md) - [GOOX.US](https://longbridge.com/en/quote/GOOX.US.md) - [GOOP.US](https://longbridge.com/en/quote/GOOP.US.md) - [MAGX.US](https://longbridge.com/en/quote/MAGX.US.md) - [AMZN.US](https://longbridge.com/en/quote/AMZN.US.md) - [MSFT.US](https://longbridge.com/en/quote/MSFT.US.md) - [NVDA.US](https://longbridge.com/en/quote/NVDA.US.md) - [OpenAI.NA](https://longbridge.com/en/quote/OpenAI.NA.md) - [NVD.DE](https://longbridge.com/en/quote/NVD.DE.md) ## Related News & Research - [Google nixes its Earth AI feature one day after launch, amid criticism it would spread misinformation](https://longbridge.com/en/news/294549600.md) - [ZoomInfo Connector Provides GTM Context Layer for Buyer Intent with Gemini Enterprise | GTM Stock News](https://longbridge.com/en/news/294701412.md) - [Google is in talks for a $1.5 billion-plus deal with AI coding agent startup Mechanize](https://longbridge.com/en/news/294965617.md) - [Gemini agent digs a 13-year-old sandbox escape out of Chrome's code](https://longbridge.com/en/news/294501470.md) - [PRESS DIGEST-New York Times business news - August 3](https://longbridge.com/en/news/294642651.md)