DeepMind's Strategic Cutback Reflects Alphabet's Stock Struggles

DeepMind Technologies Ltd., an artificial intelligence research entity under the umbrella of Alphabet Inc GOOG GOOGL, has reported a substantial reduction in its employee-related expenses. 

The AI giant cut down these costs by 39% in the previous year, coinciding with Alphabet's struggle with declining stock value.

Also Read: DeepMind Co-Founder's Startup 'Inflection AI' Secures $1.3B in Funding from Microsoft and Nvidia

Based in London, the AI firm revealed a drop in employee expenses to £595 million ($732 million) in 2022, a sharp decline from £969 million recorded in the preceding year, Bloomberg reports. 

This financial shift reflects cost-cutting measures, including closing its research lab in Edmonton, Canada.

Earlier in the year, DeepMind made headlines with the announcement of shutting down its Canadian research facility. 

This move was part of a broader strategy by Google to slash approximately 12,000 jobs globally, a decision influenced by a hiring surge and decelerated growth in the tech sector.

Also, in 2023, DeepMind clubbed the AI research groups, the Brain team from Google Research, and DeepMind to accelerate its progress in AI.

DeepMind's revenue, primarily from offering R&D services to its parent, witnessed a 21% dip last year. 

Despite this financial downturn, Google reaffirmed its commitment to back DeepMind financially for at least another year from September 28, per the disclosed accounts.

Additionally, the AI firm's financial statements indicate a commitment from Google to extend financial backing, ensuring the company's operational continuity. 

This assurance of support comes when the tech giant is navigating through a phase of slowed growth and is keen on optimizing operating costs.

Price Action: GOOG shares traded higher by 1.34% at $141.07 on the last check Wednesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.