Does Google even want to win in AI?

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0:44Nilay Patel:Support for the show comes from ServiceNow. AI is moving fast across the enterprise, but without visibility, it's just chaos. Different tools, different models, different teams using AI in completely different ways. ServiceNow turns that chaos into control. With the AI control tower, you see all your AI across the business in one place. What it's doing, what it's done, and what it's about to do. So you stay in control. To put AI to work for people, visit servicenow.com. Sponsored by Deepgram, the leader in voice AI. So you can use voices like mine. Hello, and welcome to Decoder. I'm Neal A. Patel, Editor-in-Chief of The Verge, and Decoder is my show about big ideas and other problems.

1:32Nilay Patel:Today, I'm talking with Hayden Field, The Verge's senior AI reporter, about a question that's been rocketing around the tech industry for the past week. Is Google about to lose the AI race? That's because last week, Google announced a bombshell reorganization of its AI division, Google DeepMind. Jeff Dean, the company's chief scientist, is leaving to form his own startup, and DeepMind co-founder and current CEO, Demis Hassabis, is stepping aside to focus on longer-term research inside of Google. You can read these moves and Google's reaction in a lot of different ways. So I really wanted to sit down with Hayden to dig into some of the smartest analysis we've seen this past week and really debate what we think is really going on.

2:06Nilay Patel:Also, at its core, this is an org chart story. And what is Decoder about if not org charts? Okay, Verge senior AI reporter Hayden Field on what's happening at Google DeepMind and the future of AI research. Here we go.

2:31Nilay Patel:Hayden Field, you're the Virgis Senior AI Reporter. Welcome back to Decoder. Thanks. It's great to be here. It's always chaos when you're here, Hayden. It really is. There's no week off, I feel like. Every week something crazy is happening. This time is a little bit different. The news happened last week. Google reorganized its AI division. Google DeepMind. Demis Asabas, who was the head of DeepMind, has ascended into Google heaven, where he's now the chairman of DeepMind. He's going to focus on bigger research. Jeff Dean, who had started Google Brain, was a Google fellow, left with a bunch of other people from Google to start a new lab that will run on Google Cloud.

3:06Nilay Patel:This is a big reshuffle of Google's AI efforts. It comes as Google is not competitive on the frontier anymore. There's just a lot of reactions to this news. and I wanted to just go through some of that reaction with you. You've done a lot of reporting on what's going on with Google, what's going on in the industry, and try to put this all into context for people. So let's just start at the start. Google is, by and large, the best positioned company to win AI. If you just look at what it is, how it makes money, its distribution power to put AI in front of people, putting AI in search, its resources, it feels like it should have always been the winner.

3:48Nilay Patel:And as you reported from the Elon Musk, Sam Altman trial, everyone was afraid of Dennis Asabas the whole time. So you just look at all of these ingredients and you're like, Google should be the runaway winner. And instead, I would say over the last week, a lot of people have said, well, Google's going to lose, which I find fascinating. Is that your diagnosis of what's going on with Google? Is this just a catastrophe for its bleeding edge efforts? I feel like it's really bad, but I do think people are forgetting how powerful Google is and how much they own. Like all of the integration they can do, all of the tools, all of the data they have on us.

4:26I mean, I think they have a huge safety net is what I'm saying, like a huge cushion. Even if they make huge mistakes and are falling behind, I still think you can't count them out completely because they have so much power. However, it's crazy to me that they have that much power and all that going for the company, and they're still not in the lead, let alone being kind of behind as of right now. That's what I think is crazy. And Sundar and Demis both made that point in their statements last week. Sundar wrote that the company is committed to being at the frontier and they're focused on the areas they need to improve, which is CEO speak for like, we know we need to get our shit together.

5:06And then Demis wrote that the company is entering a next chapter and that it has the ingredients to lead from here. And I firmly believe we will, a.k.a. we aren't yet, but we have the ingredients to do it sometime in the future. So I think both of them acknowledging that is pretty crazy. So, yeah, basically, it's not looking good for them, but it reminds me of someone with a trust fund. It's like, you know, they have a fallback. Don't count them out yet.

5:32Nilay Patel:That trust fund is Google Search. They have a product that millions of people use. They're putting AI into. As you and I have discussed many, many times, that is a consumer product. Consumer AI has not yet reached a point of making a bunch of money for a bunch of people, but everyone sees that as the prize. All of the action is in sort of enterprise AI right now. And you can see Anthropic is actually a big lead because of their focus on enterprise AI and in particular coding. One of the things I want to come back to is whether Google made the wrong bet on multimodality and world models, which Demis is really focused on, instead of these core enterprise use cases, and whether they even want to be at the frontier.

6:11Nilay Patel:They're saying they want to be, but maybe they don't. Maybe they just want to sell cloud services to Anthropic, which is a business that is growing for Google. But hold that thought. I want to come back to that. Just put that in your brain. This is part of the framework that I'm thinking about. You just said, Sundar said, it's the next chapter. We're committed to it. They're making changes. Hayden, like five months ago, I was sitting with Sundar Pichai and I asked him, hey, you just restructured this entire company. You got rid of all of your senior executives. You have all new ones. You made DeepMind.

6:44Nilay Patel:He said it to me. He was like, yeah, that was hard. Here's a clip. It was tough to convey it outside, but we had set the company. I pivoted the company to be AI first. We had all the ingredients. So in some ways, I felt like the Overton window had changed. People were adopting these technologies faster than we had expected. And so to me, it was a way to go and actually express ourselves through our products. But I realized we had to organize ourselves for it. And going back to my earlier point, I realized we need a core models and a core infrastructure team to power everything we are doing across Google.

7:25Nilay Patel:So a lot of my initial energy was to go set that up. One AI team, we had world-class research teams in brain and deep mind, bringing that together as Google DeepMind, which was harder than it sounds because it's like saying, go put Stanford and MIT together and create a department out of it or a university out of it. So I think doing that well. That's Sundar saying, my company wasn't organized for the AI moment. We were slow to react to ChatUET. I made this huge change to build a central infrastructure team. It's three months later, four months later, and the head of Google Brain is leaving. The head of Google DeepMind is becoming the chief scientist.

8:08Nilay Patel:Google DeepMind doesn't have a CEO anymore. It has an SVP. What do you read into that? Is that yet another reset or is it just more of the same? it's hard because I really do think it's both. I think it's a result of Demis has never been interested in the productization stuff. He's like you mentioned, really into world models and research and curing disease and drug discovery. And Jeff Dean is similar. So I'm not surprised if you're being optimistic, you could view this as kind of just the ripple effects of the conversation he had with Sundar five months ago. But I also don't think this bodes very well for the company because whenever there's a bunch of executive shakeups, as we're seeing with OpenAI literally right now, whenever there's a bunch of executive shakeups, people get nervous, people below them leave, people don't work as hard because they're thinking too much about things.

9:03Plus, a lot of the people that are working on AI at Google are there because of Jeff Dean or Demis. So what's going to happen now? I think that they're thinking about this like solely on the page logistical. Okay. Who's best positioned to, you know, speed up our productization. Yeah. Maybe that's the best decision, but when you take into account all the minds that are leaving and all the minds that will leave in the next couple of months, it's going to be rough.

9:35Nilay Patel:I think there's a lot of controversy or I guess curiosity around Gemini four, which is not yet out. They announced it at Google I.O. They put all their emphasis on the 3.5 class models. The 3.5 class models are not at the top of the leaderboards. They've actually fallen quite far behind. Does this strike you as the actions of a bunch of executives who think Gemini 4 is going to vault them back into the lead? Or do you think people are getting out because Google isn't as committed or focused to being on the frontier? I definitely think these are, as Semi-Analysis wrote in its blog, not the actions of people excited about Gemini 4.

10:08So definitely not. I think Google is pretty committed to being a frontier lab. It's more, is it going to reach its goal? And my answer to that a few months ago would have been that it was a frontier lab. And right now it's more of a wait and see. Like it is right now, but is it going to fall out of favor? Semi-analysis put it more heavily, they said in their release, like we believe DeepMind is no longer a frontier lab. I, to me, it's still got that designation, but I think in a few months that might be very different. And I didn't anticipate that changing so quickly. I think there's a chance it could go the way of meta where they're suddenly get pretty behind and they keep promising things and then taking a while to deliver.

10:54So, and same with Apple actually. So we'll see.

11:00Nilay Patel:We need to pause here for a quick break. We'll be right back.

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14:22Nilay Patel:We're back with The Verge's Hayden Field, discussing how the leadership changes at Google DeepMind tell us a whole lot about what's happening in the AI industry. I'm glad you brought up Semi Analysis. It's an investment research firm. They do great work across AI and chips and thinking about how the math of all this should work out. That post really struck me as well. I just want to read you some other parts of it. There's a lot of this in which The Verge has covered Google for a long time. And there are echoes of this throughout our coverage of Google. And there are some parts of this which feel new to me, like there are new problems for Google.

14:56Nilay Patel:So I'll just read you the quote, the longer version of the quote you just said. As Hayden said, they wrote, for all intents and purposes, we believe DeepMind is no longer a frontier lab. Google will continue meandering on and releasing models, but their odds of reaching the state of the art again have dropped to zero. This strikes me as an incredible claim, right? Like we see the model race twist and turn all the time. And to say, well, Google will never once again hit the state of the art feels like an enormous claim. So that's the part to me that feels new, right? Like week to week in AI, anything could happen.

15:34Nilay Patel:Do you think there's evidence for that? I think that's really putting the cart before the horse. Like, you know, it's been a few months since we ourselves wrote about Gemini 3's hype. It was winning the model race for a few weeks until something else came along. I definitely don't think the odds have dropped to zero for them reaching state of the art again. I mean, you know, in a way they're cutting out some of their research focus and just going all in on products. So, I mean, if they're really going all in on that and they find a way to put all their efforts behind that, I feel like they will reach state of the art again.

16:12However, what this will be is them constantly catching up right after another frontier lab. And then the other frontier labs that invest in research more and long-term stuff are going to be pulling ahead. And it's kind of the same thing as like, you know, if you're a writer and someone keeps copying you, they're always going to be right behind you. They're not going to be thinking of the next thing like you are. So I feel like that's what I foresee end up happening here. If you're not really investing quite as much in the longer-term research and all these niche areas that, you know, for example, Jeff Dean's startup is going to be looking at.

16:43I feel like they could reach State of the Art again, but it's not going to be, you know, them coming in the lead over and over again, I think.

16:49Nilay Patel:That's the part that felt new to me. I don't really know how to evaluate that claim, especially as Google's AI division changes leadership. I don't, I can't read Sundar's mind. I've tried many times. It's very difficult to see what's going on in his head. I don't know if he wants to win that race or if he thinks Gemini is good enough now to make a bunch of money inside of Google's products. I really don't know how to evaluate they'll never be at the state of the art again. The part I do know how to evaluate is the second part of the semi-analysis claim here, which it just – anybody who has paid attention to Google will immediately understand and immediately agree with this, I think.

17:25Nilay Patel:They go on to say perhaps there's some world in which Google reaches the state of the art again, but we think the odds are basically zero. The issue with Google was not Jeff Deem or Noam Shazir, who we should talk about, but rather their extremely bureaucratic, painfully slow, and strategically timid culture. That's Google. Like I literally sit with Sundar once a year and say, tell me about your culture and tell me about this bureaucracy. There's something about Sundar saying to me at I.O., I made DeepMind the center of the company and then everything else is productizing their development. and then all the people leaving and Samina also saying they'll never be at the frontier again because their culture is so bureaucratic.

18:04Nilay Patel:That is uniquely Google to me. It feels very familiar. I know you've talked to people at Google since all these announcements. Is there a sense that Google's culture needs to change even more to go and compete? There's a reason that so many people are flocking to Anthropic right now. Anthropic is not perfect by any means. They have a lot of red flags as well. But, you know, I'm seeing a lot of people from OpenAI, from Google, from Meta flock there because as we reported on a bunch of times, people in this space are a little bit post-money. A lot of times they don't care just about the salary or what they're making.

18:44They care about working for a place that aligns with their values, that they believe in. And Google has really rubbed a lot of people the wrong way when it comes to that. I mean, Jeff Dean and Demis had both in 2018 signed a public letter saying that AI shouldn't be used for lethal autonomous weapons. You know, Jeff Dean had been tweeting in the months before he left Google about, you know, the fact that mass surveillance could be a really big problem with AI. and Jeff Dean even signed an amicus brief in support of Anthropic with the whole Department of War situation, which Google ended up signing and just kind of letting the Department of War do whatever with their AI.

19:26So I could see a lot of people fleeing in the next few months because Jeff Dean seemed to be, according to my sources that I spoke with there, the person keeping a lot of people at Google. So I don't know, I could see a big exodus happening in the next few months.

19:42Nilay Patel:This is one of the bigger questions. Who was the keeper of the morals and values of this team inside of a Google that seems to be more willing to play ball with the Trump administration, with the Department of War, with the uses of AI that some people are very, very skeptical or very, very skittish about? There's been a lot of reporting about the fact that when Google acquired DeepMind and Demis, they signed a pledge to never use DeepMind technology for military purposes. That has just been watered down. Jeff Dean recently was, in fact saying we should not use AI for these purposes. There are people inside of Google who've signed a letter.

20:16There just seems to be a lot of big name talents who are saying,

20:20Nilay Patel:we don't want to commercialize this stuff in the way it's being commercialized right away. The problem is that it's the governments and the militaries who are spending all the money right now. And Google is good at making money. I think it wants to fund AI development with actual revenue instead of raising endless amounts of debts like the startup frontier labs are doing. Is that conflict navigable for Sundar and whoever's running AI now? Or is it that just the reality of being a huge corporation that funds its efforts with revenue? It's unfortunately not surprising to me for a huge corporation in the US where you have to maximize shareholder value.

20:56I mean, they're subsidizing a lot of their AI efforts right now, it seems like to me. For example, the other day I vibe-coded a new website for myself and Gemini was the only tool that I could use the free version of for like nine hours. I was like trying to do it as an everyman. So I wasn't signing into any of them. I was just like, which one will let me go like with the free version and do a ton of stuff. It was only Gemini. So, I mean, they're really trying to get people in their corner here and trying to, you know, change developers loyalty, change it near as loyalty over to them. So they need money.

21:27And to be fair, I do think they could do this a lot differently if they wanted. I mean, they're one of the largest corporations in the world and they're making a lot of money in other areas. They don't have to be doing this, but that doesn't mean they won't. And I think they will continue. But I also think, like I mentioned, that's going to lead to a lot of brain drain. One of the current Google employees I spoke with said that a lot of people around him felt like losing Jeff Dean was a big blow for morality at Google. And that also it continues is like a brain drain they've been seeing and that mediocrity is the likely result.