Alphabet Stock Rises 1.3% Despite Losing Top AI Researcher to OpenAI
Alphabet is losing one of its top AI engineers, but the stock hardly reacted. Shares went up 1.3% on Thursday, as overall market optimism after the U.S.-Iran peace deal was stronger than the effect of Noam Shazeer leaving for OpenAI. Here’s why his departure could matter more for the long-term AI competition than for Alphabet’s short-term financial results, and what analysts are saying about Google’s position.
Shazeer helped lead the development of Google’s Gemini AI models and is seen as one of the world’s most influential AI researchers. His 2017 paper, “Attention is All You Need,” introduced the architecture behind today’s AI chatbots. In September 2024, Google paid $2.7 billion to buy Shazeer’s startup, Character.AI, mainly to bring him back to the company. He announced on social media Wednesday night that he was leaving for OpenAI. OpenAI CEO Sam Altman said Shazeer was one of the people he most wanted to work with.
The small change in Alphabet’s stock price shows the difference between building technology and making money from it. Shazeer helped create Gemini but did not work on selling it. Alphabet’s way of making money from AI is still solid, even after he left.
D.A. Davidson’s analyst argued the longer-term implications are more concerning. He compared the move to a star athlete demanding a trade to a team with better championship prospects, suggesting that Shazeer’s choice signals where the frontier of the AI race currently stands. The analyst said Google remains well-positioned overall but acknowledged that the race at the frontier appears to be playing out primarily between Anthropic and OpenAI rather than Google.
Alphabet shares have risen 18% so far this year and 113% over the past 12 months.