Shares of Alphabet (GOOG, GOOGL) plunged sharply on Monday. Pressure came from several directions at once: Google is losing top AI specialists, competitors are making more noise, and artificial intelligence expenses keep rising.
By the close of trading, Alphabet shares had lost about 7%. For the company, this was the steepest daily drop in about a year.
Now investors will be watching not only Google‘s products, but also whether the company can retain key people, protect its strategy around Gemini and show returns from its massive AI investments.
Google Is Losing Key AI Specialists
The main concern in the market right now is talent. Last week, Noam Shazeer, vice president of engineering and a key member of the Gemini team, announced he was moving to OpenAI.
This departure is especially painful because Shazeer had only just returned to Google in August 2024. He came back with researcher Daniel De Freitas as part of a deal with Character.AI. Before that, both had already worked at Google, then left to start their own startup.
After returning, they were expected to strengthen DeepMind. But now, one of the key specialists is leaving again.
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The timing is also unfortunate. Google recently held its I/O conference, where it showcased new AI products including Gemini 3.5 Flash and the Gemini Spark agent. But instead of discussing new developments, the market is again talking about who is leaving the company.
Almost immediately, another negative signal appeared. On Friday, John Jumper, vice president of DeepMind, announced that after nine years at Google he is moving to Anthropic.
Jumper is known as one of the creators of AlphaFold. This AI system helped determine the structure of more than 200 million proteins and greatly accelerated work in biology and medicine. In 2024, he received the Nobel Prize together with DeepMind head Demis Hassabis.
The battle for AI specialists is getting tougher. The top researchers are being courted by Meta, Apple, Tesla, Microsoft, OpenAI and Anthropic. OpenAI and Anthropic have another argument: possible IPOs. For employees, this is a chance to get a stake in a company with big growth potential.
Google has been restructuring its AI division for years. In 2023, the company merged DeepMind and Google Brain under the leadership of Demis Hassabis. But high-profile departures still continue. For example, one of the DeepMind co-founders Mustafa Suleyman left Google back in 2022, later launched Inflection AI, and now leads consumer AI at Microsoft.
Alphabet Is Spending More and More on AI
The second reason for the sell-off is spending. Since October, Alphabet has raised about $141 billion through debt and equity financing. This money is needed for large-scale investments in AI infrastructure.
Additional pressure came from an interview with Microsoft CEO Satya Nadella for The Wall Street Journal. He said companies should rely less on AI giants, and that the artificial intelligence market is gradually becoming more mainstream and less unique.
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Before the drop, Alphabet shares had generally been rising. After the Q1 report on April 29, investors were positive about the ad business and Google Cloud.
But now the focus has shifted to spending. Alphabet expects capital expenditures in 2026 could reach $180 billion to $190 billion. That is more than double last year’s level. The company also indicated that spending will continue to rise in 2027.
Most of the money is going to data centers, computing power, and training new AI models.
Competition in the product market is also intensifying. In 2025, the Gemini 3 lineup attracted a lot of attention for its strong test results, multimodality, and reasoning capabilities. But in 2026, Claude by Anthropic is becoming increasingly prominent, especially among developers.
Alphabet remains one of the sector’s strongest companies. Its composite IBD rating is 94 out of 99. But the Accumulation/Distribution rating is at D, indicating waning interest from large investors in recent weeks.
