Four Top Google AI Researchers Leave to Launch a Startup — Alphabet Is Backing It
Alphabet(NASDAQ: GOOG)(NASDAQ: GOOGL) confirmed Wednesday that Jeff Dean, Google's chief scientist and a 27-year veteran of the company, is leaving. He isn't leaving alone.
Sanjay Ghemawat, a Google senior fellow and Dean's engineering partner for more than two decades, is going with him. So are Oriol Vinyals, a co-lead of Google's Gemini models, and Quoc Le, a founding member of the Google Brain team. The four are starting Discovery Loop, a public benefit corporation designed to use artificial intelligence to automate scientific and engineering research.
The news was immediately read as a loss. Alphabet's shares fell about 4% on Wednesday, wiping out roughly $185 billion in market value. But this is not a conventional talent drain. Alphabet is an investor in the new venture, and Google is signed on as its cloud partner. That arrangement raises a question: How much should shareholders worry when four of the company's most senior AI researchers leave on the same day — with their employer's blessing?
Dean joined Google in 1999 and, with Ghemawat, helped build much of the technical foundation the company still depends on, from early search infrastructure to the neural networks underlying its AI models. "After an incredible 27-year run, Jeff Dean is at a moment where he wants to try something new, and we're excited to support him in that," Google CEO Sundar Pichai wrote in a blog post announcing the changes.
The Gemini departures may matter even more. Vinyals co-led Google's flagship AI models, and Dean served as the program's co-technical lead. In effect, senior leadership of the model program turned over in a single day, in the middle of the AI race.
Alphabet moved quickly to contain the disruption. Demis Hassabis, who has led Google DeepMind since Google acquired his lab in 2014, becomes the unit's chair and Alphabet's chief scientist. He will continue to run Isomorphic Labs, the company's AI drug-discovery business. Koray Kavukcuoglu, DeepMind's longtime technology chief, takes over day-to-day operations as a senior vice president reporting directly to Pichai. He now leads development of Gemini 4, the company's next major model, and has been at the lab for 13 years.
The relationship with the founders continues beyond the handover. Discovery Loop's seed round is co-led by Radical Ventures and Khosla Ventures, with Alphabet among the participating investors. If the startup's research pays off, Alphabet gets a stake — and sells it computing capacity along the way.
The departures land on a business that is compounding, not struggling. Alphabet's second-quarter revenue rose 24% year over year to $119.8 billion, the company's 12th consecutive quarter of double-digit growth. Operating income climbed 30%, putting the quarter's operating margin at 34%, up 2 percentage points from a year earlier.
Google Cloud is the growth engine. The segment's revenue reached $24.8 billion last quarter, and its growth has accelerated for two straight quarters — from 32% a year ago to 63% in the first quarter to 82% now. Cloud's operating income more than tripled year over year to $8.8 billion.
That growth is expensive, though. Alphabet raised its 2026 capital expenditure plan to a range of $195 billion to $205 billion, from a previous range of $180 billion to $190 billion. The spending is heavy enough that free cash flow turned negative last quarter for the first time on record.
The researchers who just left helped build the models all that capacity serves, which is arguably why the market took their exit so hard. But the case for Alphabet never rested on four people. Customer relationships, proprietary data sets, and the surrounding research organization remain in place. Hassabis stays in the building, and a 13-year veteran now runs the lab.
Valuation has not shifted much, either. At about $362 per share as of this writing, the stock trades at roughly 27 times forward earnings. That is a premium price for a company of this size, but it is attached to 24% revenue growth and a cloud segment compounding at 82% — growth that can plausibly support it.
Does losing four researchers, even four of this caliber, change whether the stock is worth owning? For most investors, the answer is likely no. Growth is still coming from advertising and demand for cloud capacity, and both were expanding as of Alphabet's July report. If Gemini 4 slips under its new leadership, that would be a more concrete concern. So far, that has not happened.