$GOOGL shake up

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$GOOGL last year was dismissed as don’t have strong AI strategy and their search will be impacted by AI, to a strong AI player, good frontier model, chips, a cloud business growing at 80%, search is growing, successfully integrating AI with search and the share prices gained before the actual results showed.

I have talked about $GOOGL’s contribution to the current AI boom. $GOOGL has a very strong AI lab in Deepmind, which they have bought for around $500 m and of course also has a strong internal team. Yesterday, Hassabis who was CEO of deepmind and founder, has relinquished his role and moved as chairman. Along with it Jeff Dean, 25 year veteran and a very influential executive is leaving the company and forming a new startup. But more importantly he is taking Sanjay Ghemawat, google’s top AI engineer, quoc le founding member of google brain, which was merged with deep mind in 2023 and few other key engineers and scientists.

Of course $GOOGL has deep bench, but they were bleeding talent for sometime and their model is delayed, and when you see this much of senior talent exodus makes you wonder whether Google’s position in the frontier model is over?

Let us count some of $GOOGL’s strength:

  • They have data, no other company has access to so much data like $GOOGL, from search, email, youtube…
  • They have building distributed compute for a very long time, $GOOGL (it is $GOOGL’s paper on which Hadoop distributed DB was build, which is foundation of big data)
  • They know how to build and deploy distributed compute at scale
  • They have their own chip and have been using it for a long time
  • They have distribution… the market talks about Apple OS entrenched position all the time, but somehow Android doesn’t get the same consideration..
  • $GOOGL has search, android, youtube, mail etc distribution platforms
  • Lastly, they still have a great FCF generating machine, to fund unlike their competitors like OpenAI/ Anthropic. Of course $GOOGL issued equity and raising debt, but still their debt vs FCF gives them ability to raise lot more debt if required

So, $GOOGL is far from dead on AI model race. But they have suffered a big blow. The stock suffered a 5% decline on the news. Given the moves software companies are making lately, that is nothing. For context post earnings $MSFT almost move dup $100 or 25% or market cap moved up $750 B from 7/28 or in 9 trading day.

I have sold all my google except 100 shares that I purchased on 3/23/20, a vanity holding, I was so happy about nailing the bottom. :rofl: :rofl:

If market gives you an opportunity, I will again buy.

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I find you can ask Google almost any question and get an excellent answer. Info usually comes from Wikipedia if historical. But you can also get info on leaders in an industry. Technology in China, etc. etc.

I assume this is Gemeni. Supported by advertising. Works very well. I see them as a clear leader and w plans for how to fund their program.

Of course Google has to invest in AI to maintain market share in search. They would be foolish to leave a gap in services a mile wide for a competitor to exploit.

Many others are investing in AI for defensive reasons. All expect two or three companies will dominate. The rest will be left in the dust. They will either specialize or sell.

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Actually depending on the question… but they cite their sources.

$GOOGL is investing in AI even before ChatGPT. See my post about when they purchased DeepMind, etc. My point was whether $GOOGL will lose the frontier model race… there are folks who are arguing $GOOGL should make it open source. $GOOGL has successfully open sourced most of its IP. However, I doubt they will do that with AI, which by every account is going to be transformational.