• by Laurie Sullivan  @lauriesullivan, January 18, 2024

Google CEO Sundar Pichai said more layoffs are coming after eliminating thousands of jobs at Google and about 100 at YouTube.

He said that the company’s “ambitious goals” require some teams to eliminate roles to “create the capacity” for investment in promising areas such as artificial intelligence (AI), which agencies believe will only make it more difficult to support brands.  

“We have ambitious goals and will be investing in our big priorities this year,” Google CEO Sundar Pichai said to employees in the memo Wednesday, according to media reports. “The reality is that to create the capacity for this investment, we have to make tough choices.”

The news of layoffs at Google continues to drive company’s stock price higher. In the past 24 hours, Alphabet’s stock price as of Thursday morning rose from $140.98 to $144.77.

AI has become the priority area for investment for Google over fears its core search business requires a boost to compete with startups like Perplexity, and rivals like Microsoft.

Perplexity won backing from Jeff Bezos, Nvidia, and venture capitalists who bet that AI will change the way people search for information online.

At the Davos World Economic Forum, Steve Pagliuca, chairperson at Bain Capital, reportedly warned that a lot of AI startups won’t make it.

“There will be a bust of people who invested in every single thing that had the word ‘AI’ in front of it,” he told Bloomberg.

Trip Chowdhry, GM of Global Equities Research, wrote in a research note that around this time last year, the AI buzz at hackathons focused on OpenAI and Microsoft. Now use has shifted toward Google Gemini, Meta Llama2, TII Falcon180B, and Mistral7b.

Google last month released its largest and most capable AI model, Gemini. In some tests, the model’s performance incrementally surpassed the GPT-4 model from OpenAI, creator of ChatGPT.

At the time, Google said it experimented with Gemini in Search, where it made Google’s Search Generative Experience (SGE) faster for users, with a 40% reduction in latency in English in the U.S.