Google has been catching up with OpenAI in the AI race for over a year now, but its former CEO has an interesting insight into why it lost the initiative to startups in the first place.
Former Google CEO Eric Schmidt says that Google lost the initiative in AI because it focused too much on work-life balance. “You were at Google a long time, and they invented the transformer architecture,” Schmidt was asked at an interview at Stanford. “But now they seem to have lost the initiative to OpenAI, and even startups like Anthropic. I asked Sundar this and he didn’t give me a very sharp explanation. Maybe you have a sharper or more subjective explanation?”
“I’m no longer a Google employee, in the spirit of full disclosure” Eric Schmidt replied. “But Google decided that work life balance and going home early and working from home was more important than winning. And the reason startups work is because the people work like hell. And I’m sorry to be so blunt, there’s a long history of companies (like Google) winning in a genuinely creative way and really dominating a space, but not making the next transition,” he said.
Schmidt also said that it didn’t help that Google founders Larry Page and Sergey Brin had stepped away from the company, and given the reins to a professional CEO in Sundar Pichai. “I think that the truth is founders are special. The founders need to be in charge. The founders are difficult to work with. They push people hard. Much as we can dislike Elon’s personal behavior, look at what he gets out of people,” he said.
“The reason I’m being so harsh about work is that these are systems which have network effects. So time matters a lot,” Schmidt added.
Eric Schmidt seemed to be saying that even though Google invented the transformer architecture which has led to the current AI revolution, its employees weren’t working hard enough to capitalize on it. They dropped the ball on AI, and founder-led startups like OpenAI took Google’s discoveries, outworked Google, and released a product that took the world by storm. And while Google has now come out with its own Gemini series of models, it still is lagging behind OpenAI, even two years after ChatGPT’s release.