Google Parent Slashes Projects At Product Innovation Unit By 50% Amid Pivot To Artificial Intelligence: Report

Alphabet Inc. GOOG GOOGL has told the employees at its in-house R&D division, aka Area 120, that the number of incubator projects is being cut from 14 to seven, reported Tech Crunch, citing a source with knowledge of the matter.

Google has since then reportedly confirmed the development in a statement to the media outlet.

What Happened: Employees at the shelved projects have been asked to find new jobs within the company by the end of January 2023 or face the prospect of termination, the report said.

See also: Google Parent Alphabet's Search Outperformance, YouTube Shorts Momentum, AI-Focus: Munster's Analysis Of Q2 Results

Why It's Important: Area 120 has been serving as Google’s in-house incubator or product innovation unit since 2016, providing opportunities for employees to build experimental ideas full-time. Some of the successful products developed by the division included the HTML5 gaming platform GameSnakcs, and AI-powered conversational ads platform AdLingo, currently integrated into Cloud, said the Tech Crunch report.

The division would now sharpen its focus on Google’s AI-first projects instead of its earlier stance of focusing on product incubation across Google, the report said, citing Area 120 lead Elias Roman.

Recently Google CEO Sundar Pichai said at the Code 2022 conference that AI powers everything that Google does and therefore it was more of an AI company.

Alphabet shares closed Wednesday’s session at $105, up 0.65%, according to Benzinga Pro data.