Alphabet on Wednesday announced a wholesale reorganization of its AI operations, with Demis Hassabis relinquishing day-to-day command of Google DeepMind to become chairman of the lab and Alphabet’s chief scientist, and Jeff Dean, the company’s chief scientist, departing after 27 years to co-found a startup. Shares fell about 4 percent.

Koray Kavukcuoglu, a 13-year veteran of DeepMind and formerly its chief technology officer, takes over as senior vice president running the lab. Per the staff memo Sundar Pichai posted to Google’s corporate blog, Kavukcuoglu will oversee Gemini model development, frontier research, the Gemini app and developer teams, and will lead work on Gemini 4. In his own note to staff, Hassabis said he wanted “to hand over my day-to-day operational responsibilities at GDM, so that I have the time and space to focus on the big picture,” and that he believed artificial general intelligence was “close at hand.”

The subtext is less serene. Gemini has slipped repeatedly and trailed OpenAI and Anthropic at the frontier. Google lost Gemini co-lead Noam Shazeer to OpenAI in June, and John Jumper, who shared a Nobel Prize with Hassabis for AlphaFold, has decamped to Anthropic. Time, citing two people familiar with his schedule, reported that Hassabis had grown scarce from Gemini meetings in recent months, focused instead on post-AGI readiness, safety, and government engagement, including a recent G7 summit appearance. “I can’t say that I’ve ever seen Demis walk around the office in the Gemini area,” one DeepMind engineer told Fortune.

The reshuffle around him bears that out. Time, citing four people with knowledge of the changes, reports that chief AI readiness officer Lila Ibrahim will now report to senior executive James Manyika; several safety teams move under president of global affairs Kent Walker; communications, legal, and marketing fold into Google’s central groups. DeepMind co-founder Shane Legg continues to report to Hassabis.

Dean’s exit is being framed as amicable, with a Google representative telling CNBC the company will invest in his new venture. Senior fellow Sanjay Ghemawat is leaving alongside him.

All of this lands against a spending picture that has begun to strain the balance sheet. Alphabet spent more than $90 billion on AI in 2025, per Bloomberg, and is on track to roughly double that this year. Google turned cash-flow negative last quarter for the first time on record and has guided to full-year capex of up to $205 billion. On the most recent earnings call, Pichai told analysts the company remained “supply constrained.”

Founders don’t usually become chairmen when the product is winning.

Sources