Alphabet sees $225 billion market-cap wipeout as investors fear it's losing the war for AI talent

By William Gavin

Two AI leaders, including a Nobel laureate, recently said they would leave Google for rival labs

Two artificial-intelligence leaders, including a Nobel laureate, said they would leave Google for rival labs, sparking concerns over the company's ability to compete in the AI race.

Alphabet's stock suffered its biggest one-day decline in more than a year and a record loss of market capitalization Monday, reflecting investor concerns over the company's recent loss of talent in the artificial-intelligence space.

Hyperscalers vying to lead the AI race are competing for a lot of things, not least of which are talented professionals capable of shaping the development of new technology. In the last week alone, Google parent Alphabet (GOOG) (GOOGL) has lost two high-profile AI leaders.

Noam Shazeer, co-lead of Google's Gemini model, said last week that he was leaving Google DeepMind lab to join ChatGPT-maker OpenAI. His departure came just a few years after he returned to Google from the startup Character.AI as part of a $2.7 billion deal between the companies.

Dig deeper: Google shake-up highlights how human brains may be the scarcest AI resource of all

On Friday, John Jumper, a Nobel Prize winner, also said he would leave Alphabet. His new destination is Anthropic, the developer of the Claude AI model.

Citizens analyst Andrew Boone noted last week that the bear case for Google a few years ago was that it would lose talent to new AI rivals and be unable to catch up on development. Now those fears seem to be rearing their head once more.

The departures are "raising the concern that Google is losing the war for talent at the frontier of AI," D.A. Davidson managing director Gil Luria told MarketWatch over email. "Google had the state-of-the-art model for a few weeks last year, which helped it get credit as an AI winner, but has fallen off since, and these departures may mean it is falling behind."

Alphabet's stock fell 5%, its largest percent decrease since May 7, 2025, according to Dow Jones Market Data. It also lost $225 billion in market value over the course of the session, for its biggest one-day loss ever, according to Dow Jones Market Data.

Other hyperscaler stocks saw weakness as well on Monday. Microsoft's stock (MSFT) fell 3% after the company announced plans to build a new data-center campus, while Meta Platforms shares (META) slipped 2% after a shake-up at WhatsApp.

Separately, Alphabet on Monday said DeepMind would collaborate with film studio and distributor A24 on AI research that could ultimately help with things like movie production. Alphabet said it would also invest in A24, but did not disclose the amount. The Wall Street Journal reported that the investment would be around $75 million.

Hollywood has increasingly been experimenting with AI. Disney (DIS) teamed up with and agreed to invest $1 billion in OpenAI last December - but that deal ended in March. Netflix (NFLX) in March also agreed to buy actor Ben Affleck's AI startup, InterPositive.

-William Gavin

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06-22-26 1648ET