丨Score

① As the CEO of Alphabet, Xander Pichai privately complained that he could not manage some executives. The reason for this may be that founder Page is still in charge.

② The Alphabet CEO is very different from the Microsoft CEO, who has more power and can keep management in line.

③ Google Play earned $10 billion to $12 billion in operating profit in 2022, accounting for 13 to 16 percent of Alphabet's total operating profit.

④ At this year's Google I/O, Google's annual software developers conference, Pichai will likely announce new artificial intelligence features for search, Google Docs and Google Cloud products.

In the field of artificial intelligence, Google has always been like the "West Point" existence, even the OpenAI founding team of R & D staff are basically from Google. But while ChatGPT has exploded out of the gate with its outstanding performance, bringing OpenAI into the public eye and making Microsoft smile with its heavy investment, Google has become the loser in the AI race. Rampant internal bureaucracy, risk averse management, and a draped co-founder are the main causes of Google parent company Alphabet CEO Xander Pichai's inability to embed AI R&D results into existing products such as search. The following is the full text of the article:

Since Pichai became chief executive of Google parent Alphabet in 2019, he has been candid with close friends about the difficulties he faces running the massive Alphabet: a long-standing internal power struggle, strict oversight by regulators, and constant pressure on management from unruly employees. Pichai said in an internal meeting a few years ago that being Alphabet's chief executive had taken its toll on him and that he would hand over the reins in a few years, according to people familiar with the matter.

Pichai shared those feelings with close friends before the panic that has plagued Google in recent months. To this day, the Alphabet marquee is still in Pichai's hands. The emergence of panic has forced him to become more engaged. As advertisers began to cut spending last fall, Google's business began to stagnate. In addition, rivals Microsoft and OpenAI launched a new generation of artificial intelligence services that could threaten Google's dominant position in search and the more than $150 billion a year in advertising revenue associated with it. Suddenly, Google must go after rival Microsoft in areas it once dominated.

"The current situation is calling for the first time for Sandra to become a wartime CEO, and we haven't seen if he's ready for the challenge," said Adrian Aoun. Aoun has sold startups he founded to Google in the past and assisted Google co-founder Larry Page in 2015, restructuring Google into Alphabet.

The problems exposed by this crisis began to worsen during Pichai's tenure at the helm, but they didn't seem to matter until Alphabet's advertising revenue and profits began to shrink: he prefers incremental improvements to products over drastic adjustments; and can tolerate ballooning employee numbers, a lazy corporate culture and an inefficient organizational structure. Perhaps most importantly, despite being CEO of Alphabet, Pichai doesn't have much power over some executives.

For years, Pichai has complained to close friends around him that he can't manage some executives. Pichai has said he can't get Demis Hassabis, CEO of DeepMind, Alphabet's London-based artificial intelligence unit, to prioritize projects or share software code with Brain, another large artificial intelligence unit within Google that often develops the same type of machine learning software as DeepMind. Brain is another large artificial intelligence unit within Google, often developing the same type of machine learning software as DeepMind.

Longtime executives at Google attribute this status quo to a corporate culture similar to that of an academic or government agency. In such a culture, veteran employees may or may not obey orders from their superiors. In addition, several Alphabet employees say Pichai abhors conflict with colleagues.

There may be another reason Pichai can't directly lead the management of Alphabet, which has a market capitalization of $1.3 trillion: Pichai's predecessor, Larry Page, is still draped in power. As co-founder of Google, which developed the money-maker search engine, Page is still on Alphabet's board and controls the company through special stock with another co-founder, Sergey Brin. Although Page has largely stayed out of Alphabet's internal affairs so far, Pichai spoke with Page, who was his boss for a long time, about DeepMind chief executive Hassabis when he wanted his business to be independent of Google, people familiar with the matter said.

01 Very different from Microsoft CEO

Even the recluse Page recognizes the external threat to Google's AI supremacy. Page has long seen Google as a vehicle for the eventual development of general artificial intelligence - computers that can learn on their own and reason beyond humans. In recent months, he and Brin have participated in a number of AI strategy sessions held within Alphabet, a move that reflects Alphabet's extraordinary concern about the threat OpenAI could pose.

Last week, Alphabet announced that DeepMind would merge with Brain to form a new division, Google DeepMind, which Alphabet said would "dramatically accelerate our progress in artificial intelligence." While it may seem logical to integrate the teams, which have been developing similar software in parallel, the move came as a shock to many Google employees because the two teams have different cultures, and because for years Brain's head Jeff Dean, who has been in competition with DeepMind's Hassabis, chose to to step aside.

Previous media reports have claimed that Page has attended several internal company meetings. According to an employee, shortly after the recent Alphabet board meeting, Google announced the decision to merge its AI teams, with Hassabis to head the new combined team. This timing suggests that the final decision may come from the board level, rather than Pichai.

Pichai's power at Alphabet contrasts with Microsoft CEO Satya Nadella's power at Microsoft. Nadella seems to be able to keep his management team in lockstep as he ties Microsoft's future to that of OpenAI through the partnerships he has built by investing tens of billions of dollars. This means that some Microsoft executives and managers have had to make sacrifices: Microsoft is allocating computing power company-wide for training AI models so that efforts related to OpenAI, including embedding OpenAI's technology into Microsoft's core products, can have a better chance of success. Microsoft's Azure cloud business is funding OpenAI's snowballing computing infrastructure and AI development. After Nadella lost patience with the sheer number of AI researchers within Microsoft, he outsourced AI development to OpenAI.

02 Standing the last shift

In the years since he became CEO, Pichai has continually told some colleagues that he misses the way things used to work. But one person who works closely with him says Pichai plans to lead Alphabet through its recent financial and competitive challenges. Pichai's publicists have thrust him into the spotlight to showcase Google's work developing the next generation of artificial intelligence products. He recently appeared on CBS's "60 Minutes" and a New York Times podcast.

Whether Pichai can stay on may not be up to him. According to current and former Alphabet employees, the general consensus across the company is that he may not be the right person to continue as CEO at this time. Given Alphabet's relatively strong stock performance since he took over, investors don't seem to be calling for a change of hands at Alphabet, but there are still some activist investors clamoring for him to cut costs. According to Koyfin, the market has sent warning signals in recent weeks because Alphabet's stock valuation (dynamic price-to-sales ratio) is lower than Facebook parent Meta for the first time in a year.

As Pichai has repositioned Alphabet on artificial intelligence, some executives have been promoted. Some media reports say that the promoted executives include Thomas Kurian, head of Google Cloud. Before the promotion, Kurian just took over Google's team responsible for designing a special chip to support artificial intelligence. Earlier, Kurian called for more firepower to fight Microsoft in the business of selling artificial intelligence services to cloud customers. With Google's advertising revenue growth stagnating, the cloud business is more important than ever. In its latest quarterly earnings report, Alphabet disclosed for the first time that its cloud business has achieved an operating profit.

In addition to Kurian, the executives promoted include Hassabis and James Manyika, a former Obama-era administration official and consultant at consulting firm McKinsey, and one of several executives who appeared on "60 Minutes" with Pichai. Manyika just took over a roughly 2,000-person research group from Brain's original head, Dean, and is deeply involved in Alphabet's artificial intelligence product strategy.

03 The most disciplined executive

A former software engineer and business consultant, Pichai joined Google as a general product manager in 2004, but over the next decade he became Page's designated successor. Pichai rose through the ranks because he was the company's lowest-profile, most compliant executive during a period when Page was purging executives who he thought were too divisive or morally corrupt.

When Page reorganized Google into Alphabet in 2015 and became CEO of the parent company, Pichai was promoted to CEO of the subsidiary Google. As the parent company, Alphabet oversees Google and various subsidiaries, setting goals for long-term projects such as driverless cars and smart cities. By separating from Google, these technologies are expected to be better developed.

In the years since Alphabet was founded, Google has relied on its search engine and Android mobile operating system to allow steady growth in revenue and net profit. Starting in 2015, Google's advertising business has benefited because of machine learning techniques developed by Dean's team and other researchers hired by Google from academia.