Alphabet's Class A shares slipped 0.42% to $362.26 in premarket trading Thursday after Noam Shazeer, the vice president of engineering and co-lead of Google's Gemini AI models, announced he is leaving the company to join rival OpenAI. Shazeer shared the news on social media Wednesday, writing that he was "incredibly proud of the amazing team at Google and everything we've built together" but had decided to make the move. OpenAI Chief Executive Sam Altman responded that bringing Shazeer aboard was "only 10 years in the making," a reference to Shazeer's long history at the center of the modern AI boom.
The departure carries particular weight because of Shazeer's track record. He is a co-author of the landmark 2017 paper "Attention Is All You Need," the research that introduced the transformer architecture underpinning virtually every major large language model built since, including both Gemini and ChatGPT. Shazeer left Google once before, in 2021, amid disagreements over how aggressively the company should pursue chatbot products, and went on to co-found Character.AI. Google brought him back in 2024 in a deal reportedly worth $2.7 billion, reuniting him with his former research group as part of an effort to accelerate Gemini's development and close the performance gap with ChatGPT.
His exit, less than two years after that costly reunion, raises fresh questions about Google's ability to retain top AI talent even as it doubles down on the technology. Alphabet this month raised its planned equity sales to $84.75 billion and maintained 2026 capital expenditure guidance in a range of $180 billion to $190 billion, underscoring how central AI infrastructure spending has become to the company's strategy. Google's official response to Shazeer's departure was measured, with the company saying it was "grateful for Noam's meaningful contributions."
The move comes weeks after Alphabet unveiled new AI products, including the Gemini 3.5 Flash model and the Gemini Spark AI agent, at its annual developer conference, and it follows a string of recent wins for the company's cloud and AI businesses. Google Cloud revenue reportedly crossed $20 billion in a recent quarter for the first time, growing 63% year over year, while the company's cloud backlog has nearly doubled to roughly $462 billion. Search query volume remains at an all-time high, and Gemini-related paid subscriptions have climbed toward 350 million, according to company disclosures.
Even so, the symbolism of losing a co-lead of Gemini to OpenAI, which is itself reportedly preparing for an initial public offering, is difficult for the market to ignore entirely. Talent competition among the largest AI labs has intensified sharply this year, with OpenAI separately recruiting a former Netflix recruiting executive as it works to nearly double its headcount to roughly 8,000 employees by year-end. Alphabet shares closed Wednesday at $363.79, down 2.53%, alongside a broader tech-sector pullback tied to the Federal Reserve's hawkish policy signals, meaning Thursday's additional dip reflects both the Shazeer news and lingering macro pressure on growth stocks.
Analysts covering the stock remain broadly constructive despite the noise. The average 12-month price target on Alphabet sits well above current levels, and the company's underlying cloud and search fundamentals continue to outperform expectations, even as questions about AI leadership depth linger in the background.