The recent plunge in the stock price of Google's parent company, Alphabet, clearly shows how fierce and risky the war for AI talent is. The events in which Noam Shazier, the core developer of the Gemini model, and John Jumper, a Nobel Prize winner in chemistry, moved to OpenAI and Antropic, respectively, brought structural problems within Google to the surface. Some criticize Google for being trapped in a ‘maze’ of huge organizational bureaucracy and a risk-averse culture, and that its pace of innovation has slowed down compared to its competitors that move as agilely as startups. The inability to retain key talent despite pouring in a huge amount of capital is raising doubts in the market that AI leadership cannot be maintained through infrastructure investment alone.

Meanwhile, SpaceX is attempting to build a new profit model called AI infrastructure business by issuing large-scale corporate bonds following its IPO. However, the market is viewing these aggressive investment moves with concern. Negative free cash flow, which is expected to continue until 2029 due to massive capital expenditures, is a huge burden for investors, and in a high interest rate environment, funding costs are also acting as a risk that cannot be ignored. Space

The ‘profitability uncertainty’ hanging over the entire AI industry has even put the Trump administration’s AI-centered economic plan to the test. So far, the AI ​​stock rally has been a major driving force supporting U.S. household consumption by creating a wealth effect, but as technology stocks are showing a decline from their highs, there is a possibility that this may spill over to the real economy. Financial institutions, including Goldman Sachs, warn that the market will react more sensitively if a specific business model to recover large-scale data center investments is not found. In particular, as questions about the efficiency of cloud powerhouses' investments grow, companies have begun to look for cheaper alternative models, which is expected to lead to fierce price competition in the AI ​​market.

Despite this crisis, Google is seeking new breakthroughs through a revamp of its search box and partnership with film production company A24. Despite occupying 90% of the search market, the exodus of users who prefer chatbots and the rapid growth of alternative search engines such as DuckDuckGo pose an existential threat to Google. In particular, the AI ​​search promoted by Google carries the risk of ‘cannibalization’ that conflicts with the existing advertising revenue model. Despite the positive news of inclusion in the Dow, what Alphabet faces is a difficult management task that goes beyond technological superiority and must find a balance between user experience and profit model.