Google shares fell nearly 4% after the company announced major leadership changes in its AI-focused DeepMind division. Alphabet's Class C (GOOG) stock was trading at $361.58 with Class A (GOOGL) stock trading at $364.67. Despite Wednesday's drop, Google shares are still up 86% over the past year and 15% year to date.
Google's stock has been supported by strong AI growth, with AI-related revenue rising 82% year over year in its latest quarter. However, the company is also facing challenges after delaying its Gemini 3.5 Pro AI model and increasing its capital spending plans, according to Bloomberg.
Google AI leadership changes
The stock decline came as Google unveiled a major leadership shake-up in its AI division, with DeepMind CEO Demis Hassabis taking on a new role and Chief Scientist Jeff Dean leaving the company to start a new AI venture.
Hassabis will continue leading Isomorphic Labs, Google's AI-based drug discovery company. Google DeepMind's current Chief Technology Officer (CTO), Koray Kavukcuoglu, will become Senior Vice President of the AI unit. Kavukcuoglu will report directly to Google CEO Sundar Pichai.
Another major change is that Google's Chief Scientist Jeff Dean is leaving the company. Google Senior Fellow Sanjay Ghemawat is also leaving, according to Axios. Dean and Ghemawat are starting a new independent AI company called Discovery Loop. Discovery Loop will operate as a public benefit corporation, meaning it aims to balance business goals with public interest.
{{/usCountry}}Another major change is that Google's Chief Scientist Jeff Dean is leaving the company. Google Senior Fellow Sanjay Ghemawat is also leaving, according to Axios. Dean and Ghemawat are starting a new independent AI company called Discovery Loop. Discovery Loop will operate as a public benefit corporation, meaning it aims to balance business goals with public interest.
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Google will invest in Discovery Loop. Google will also provide cloud computing services to the new company. The leadership changes come at a time when Google is facing intense competition in AI. Google is trying to keep pace with rivals like OpenAI and Anthropic in the fast-moving AI race. The latest changes are part of several recent leadership shifts and employee departures inside Google's AI division.
Why Demis Hassabis stepped down
Hassabis said he has spent his entire career working toward Artificial General Intelligence (AGI). He believes AGI now feels closer than ever before. Hassabis said it is important to make the right decisions as AI develops because it could affect humanity's future. He said stepping away from daily management will give him more time to focus on the bigger scientific challenges of AI.
Hassabis said he wants to help shape the future of AGI in the best possible way. His new position allows him to spend more time on AI research instead of daily business operations. Hassabis is well known for leading AlphaFold, an AI system that predicts the 3D structure of proteins. His AlphaFold work helped him and researcher John Jumper win the 2024 Nobel Prize, according to Axios.
Why Jeff Dean is leaving
Jeff Dean said leaving Google gives him more freedom to focus on scientific discoveries in AI, according to The New York Times. He said an independent company can sometimes make decisions that are not purely based on financial returns.
Challenges facing Google AI
The leadership changes come as Google DeepMind faces growing internal pressure. Some employees have raised concerns about the company's direction. Several well-known AI researchers have recently left Google for rival AI companies. One of Gemini's co-leads is among the researchers who have left.
Axios reported that Google's Gemini 3.5 Pro is running months behind schedule. Some Google sources told Axios that low employee morale is one reason for the delay. The leadership reshuffle is expected to help Google move faster as competition in AI continues to grow.