Fears that Google was lagging in artificial intelligence were allayed by the company’s spectacular earnings report in April, which caused the largest spike in Alphabet shares since 2015 and, for the first time, put its market value above $2 trillion.
At an all-hands meeting the following week, executives joyfully discussed the results with Google’s employees, demonstrating that Wall Street had a different perspective than the company’s employees. In a comment read by management during the meeting, one employee stated, “We’ve noticed a significant decline in morale, increased distrust, and a disconnect between leadership and the workforce.” How does leadership intend to resolve these issues and restore the unity, trust, and morale that have been the cornerstones of our business’s success?
The pressure cooker of AI race
Following the launch of ChatGPT in late 2022, the tech sector witnessed a surge in AI products from popular startups like OpenAI and Perplexity, as well as from Microsoft, which introduced its Copilot AI assistant, and Meta, which integrated its Meta AI chatbot into its apps’ search features. The popularity of those tools has weakened Google’s dominance in U.S. search. According to research firm eMarketer, the company’s market share in search advertising is predicted to fall below 50% in 2025, marking the first time it has done so in over ten years.
Google built its products in response to the demands of the emerging AI tools. In 2024, the business rebranded its AI model family as Gemini and launched several well-received goods. However, as it rushed to catch up, the business also unveiled two AI products that initially looked awkward. Google introduced Imagen 2 in February, converting user inputs into AI-generated visuals. The product was scrutinized for historical errors people found when it was released. Interestingly, the application displayed a racially diverse group of troops dressed in 1943 German military uniforms when a user requested it to display a German soldier.
A quest for vision
Google had some noteworthy successes in the face of external pressure, especially in the latter part of 2024, which improved sentiment inside and outside the organization. The lightweight Gemini Flash model, which has been well-liked by developers, is part of Google’s most potent new Gemini model suite, which serves as the foundation for all of the company’s AI products. Over the last four quarters, YouTube’s total revenue from ads and subscriptions has topped $50 billion.
With operating margins of 17%, Google’s cloud business grew at the quickest rate among the major internet companies in the third quarter, increasing 35% from the previous year. In addition to launching Trillium, its potent sixth-generation Tensor Processing Units, or TPUs, which were also found to have driven Apple’s AI models, the company has had double-digit revenue growth for the last four quarters. By the end of October, AI Overview had around 1 billion monthly users despite the errors. The company’s cloud infrastructure has grown steadily due to the need for AI software. Additionally, this month, Google released NotebookLM, an enhanced AI note-taking tool, and Veo 2, a remarkable video production tool.
In December, Google revealed Willow, a chip it claims is its most significant advance toward commercially practical quantum computing. Another promising development was Waymo’s self-driving car division, which has extended its robotaxi service to three cities and is setting the stage for further growth in 2025. With plans to commercially launch in Austin, Texas, and Atlanta the following year, the business has already delivered 4 million autonomous rides this year. However, there are concerns about Pichai’s capacity to lead Google into the future as he nears ten years in the role and begins his sixth year as CEO of parent Alphabet. On the company’s Memegen bulletin board, staff members frequently voice their internal complaints about the leadership, and some have gone public. In a LinkedIn post that garnered over 8,500 replies earlier this year, a Google software engineer stated, “Google does not have one single visionary leader.” “Not one. Everyone in the C-suite, SVPs, and VPs is incredibly dull and narrow-eyed.
