Nobel Prize-winning computer scientist Demis Hassabis is stepping back from day-to-day leadership of DeepMind, Google's primary AI research laboratory, as part of a sweeping leadership reshuffle that wiped over $185 billion from Alphabet's market capitalization on Wednesday. The company's leadership is calling it a step up, but investors aren't entirely convinced.

Hassabis has been appointed Alphabet chief scientist and DeepMind chair, with Koray Kavukcuoglu taking over as DeepMind's operational lead and becoming a senior vice president at Google DeepMind. "I can't imagine a better person than Demis to do it," CEO Sundar Pichai wrote on X. "He'll stay closely connected to Koray and the GDM teams."

Google's String Of AI Exits

The reshuffle coincides with a notable departure. Chief Scientist Jeff Dean, a 27-year Google veteran, is leaving alongside several colleagues to found Discovery Loop, a public benefit corporation focused on accelerating discoveries in machine learning, science, and engineering. Google will participate as a founding investor and cloud partner, Pichai confirmed.

Previously, Noam Shazeer, co-author of a 2017 paper on transformer architecture that galvanized AI development, and John Jumper, who shared in the AlphaFold Nobel Prize in 2024, both left in recent months for OpenAI and Anthropic, respectively.

The churn comes as Alphabet faces intense competition in the AI market from Anthropic, OpenAI and other tech majors. The company vaulted ahead in the race to develop powerful frontier AI models with an updated version of Gemini last fall.

Since then, it has struggled to keep pace with competitors' capability advances as measured by widely used benchmark tests, the Wall Street Journal reported. Google's Gemini 3.5 Pro model is reportedly delayed.

Investor patience had already been stretched thin two weeks ago, with Google's shares falling 7% after the company pledged to step up AI spending but stopped short of providing a timeline for its next model launch. The stock recovered, only to slide nearly 4% on Wednesday following the leadership shake-up. Shares, however, were up nearly 1% in early premarket trading on Thursday.

"We have to continue to move fast with clear purpose here," Pichai said in a blog post about the leadership changes. "We are committed to being at the frontier and are super focused on the areas where we need to improve."

Investors, Analysts Remain Confident On GOOGL

Still, some pockets of the market remain confident about Alphabet and its position in AI.

Venture capitalist Vinod Khosla wrote: "@Google has been the real source of AI acceleration from @Waymo self-driving cars when most people were skeptics to buying @GoogleDeepMind to investing heavily. Lots of research in universities but this team, including Sundar, Larry & Sergey, deserve full credit for believing, investing and accelerating it. Huge impact."

"As said earlier, AGI is now at hand so these moves are logical," said Chamath Palihapitiya, a well-known venture capitalist, who led a multi-million dollar early investment six years ago in Groq, a high-speed AI chip startup launched by the team that designed Google's internal AI processors.

"GOOGL will be fine. Smart folks leaving, but it's way bigger than any individual at this point," said Daniel Newman, CEO of The Futurum Group.

were down 2.5% in overnight trading ahead of Thursday. On Stocktwits, the retail sentiment for the stock remained 'neutral' for a second day.