Google's AI Challenge: Gemini's Hope Amidst Competition and Scrutiny

Google's Crisis and Gemini's Hope

Despite achieving remarkable success in terms of performance and stock price in 2024, becoming a darling of Wall Street, Google CEO Sundar Pichai conveyed a strong sense of crisis to employees at the end of the year. During a 2025 strategy meeting, Pichai emphasized the urgency of the situation. This starkly contrasted with Google's stock hitting record highs earlier in the year, its market capitalization exceeding $2 trillion, and the rapid growth of its cloud business.

Pichai's sense of crisis stems primarily from the fierce competition in the field of artificial intelligence. Since the emergence of ChatGPT, Microsoft, Meta, and numerous startups have launched their own AI products. The popularity of these tools is gradually eroding Google's dominance in the search domain. It is predicted that Google's share of the search advertising market will fall below 50% in 2025, a first in over a decade. The search business is the bedrock of Google, and its weakening has undoubtedly affected employee morale, with many employees complaining on the internal network about the company's lack of visionary leadership.

Faced with these challenges, Pichai stated at the strategy meeting that 2025 will be a critical year, with Google placing greater emphasis on the development of its AI business. He stressed that Google's goal is to create new large-scale user-facing (to C) applications, and this hope rests on Gemini. Executives believe that Gemini has the potential to become Google's next application with over 500 million users. Currently, the Gemini large model is supporting all of Google's AI products, including the lightweight model, Gemini Flash.

In response to employee concerns about ChatGPT becoming synonymous with artificial intelligence, Pichai passed the question to DeepMind co-founder Demis Hassabis. Hassabis stated that the team will accelerate the development of Gemini applications and described a vision of a universal assistant that will run seamlessly in any field, mode, or device.

Layoffs to Fund AI Business

Google's AI business did not progress smoothly in the first half of this year.

In February, Google rebranded its large model product from Bard to Gemini and launched Imagen 2. However, it faced scrutiny due to historical inaccuracies, and it took six months to relaunch.

In March, Google co-founder Sergey Brin admitted that they "messed up" in image generation.

In May, the launch of AI Overview also generated similar backlash, as the product gave absurd answers when users asked questions such as "How many rocks should I eat per day?"

These missteps made Google a laughingstock in the AI business. Subsequently, Google began organizational restructuring, with layoffs being a key step. By the end of the third quarter of this year, the total number of Alphabet employees had decreased by approximately 5% compared to the end of 2022. The head of human resources stated that the layoffs were intended to free up funds to develop the AI business. After the layoffs, funds were indeed shifted, with the company's massive resources flowing to the AI and DeepMind departments.

DeepMind and the AI team have larger travel and hiring budgets, and some employees have been moved out of the old San Francisco waterfront offices, replaced by AI-related teams. Additionally, Google moved the development team for the Gemini AI application to the DeepMind department, led by AI chief Demis Hassabis. Employees have expressed appreciation for Pichai's leadership changes.

However, this unequal distribution has also caused dissatisfaction in other departments. The head of human resources stated that in the new year, layoffs may become even more brutal to develop AI.

Regulatory Crisis and Being Besieged

In addition to AI, regulatory issues are another major challenge facing Google CEO Sundar Pichai. As its influence expands, Google is facing stricter regulatory scrutiny than ever before.

In August, a federal judge ruled that Google illegally monopolized the search market.

In October, a US judge issued a permanent injunction forcing Google to provide alternatives to the Google Play app store for Android phones.

In November, the Department of Justice demanded that Google divest its Chrome internet browser division and accused the company of illegally monopolizing online advertising technology.

Furthermore, UK competition regulators have also raised objections to Google's advertising technology practices.

Pichai stated at the strategy meeting that Google is facing global scrutiny due to its size and success. He believes this is part of the process that needs to be experienced under the trend of technology having a massive impact on society.

For Google, 2025 will be a year of unleashing ambition amidst crises. In this contest among tech giants, whether Google can regain its leadership position in the AI field with Gemini, while maintaining growth under regulatory pressure, will be the focus of global technology circles and investors. How Google will break through the current situation is also highly anticipated.