Alphabet suffered its worst trading day in more than a year as investor nerves rose over artificial intelligence spending and the departure of two prominent researchers. Shares of the Google parent closed down about 5% on Monday, lagging the Nasdaq and other large tech stocks.
The sell-off came after a wave of talent exits that revived concerns about Google’s ability to hold its AI edge. In recent days, high-profile departures from DeepMind and Google’s Gemini team have put added pressure on the company just as it has been pushing new AI products.
Two exits that rattled investors
Last week, Noam Shazeer, Google’s vice president of engineering and a co-lead of its Gemini AI models, said he was leaving for OpenAI. His move came less than two years after he returned to Google, and after Google had brought him and fellow researcher Daniel De Freitas back into DeepMind in August 2024 through a partnership tied to Character.AI.
Another blow followed on Friday when John Jumper, DeepMind vice president and engineering fellow, said he was leaving for Anthropic after nine years at the company. Jumper is widely known as a co-creator of AlphaFold, the AI system that has predicted more than 200 million protein structures and accelerated biological and medical research.
Why the market is worried
The departures landed as Alphabet continues to spend heavily on AI and tries to prove that its vertically integrated AI stack can produce real returns. The company has raised $141 billion in debt and equity since October, underscoring the scale of its push.
That spending is now facing a tougher question from investors: whether cheaper, more interchangeable models could weaken the case for such large outlays. CNBC noted that the concern intensified after a Sunday Wall Street Journal interview with Microsoft CEO Satya Nadella, who said the AI market was commoditized and called for less dependence on “AI Giants.”
Google users also reported outages on Gmail and YouTube on Monday, adding another layer of frustration around the company on a day when its stock was already under heavy pressure.
Alphabet’s decline marked the steepest drop since about a 7% fall in May 2025. For now, the company is trying to reassure investors that its AI strategy can still create a durable advantage, even as rival labs keep drawing away some of its most visible talent.
