Google Insiders Are $9 Billion Richer After AI-Fueled Stock Rally

Topline

The already stuffed wallets of several billionaire insiders at Alphabet grew even fatter Thursday as shares of Google’s parent company rallied, after the company’s Wednesday announcement of various new artificial intelligence features—capped by integrating AI into Google’s search engine——largely cooled investors’ fears about a wide gap in the AI space between Google and rival Microsoft.

Hands up if you just got rich – Google CEO Sundar Pichai speaks during the Google I/O keynote … [+] session Wedneday.

AFP via Getty Images

Key Facts

Alphabet’s stock surged nearly 5% Thursday, bringing its two-day gain to 9% following CEO Sundar Pichai’s presentation introducing a variety of ways the company plans to utilize AI in its search engine and beyond.

Shares of the Silicon Valley stalwart are now at their highest level since August.

Google demonstrated “AI powered search can still be the gateway” to online activity and drive advertising revenue growth, according to Bank of America analysts Justin Post and Joanna Zhao, deeming Wednesday’s presentation “a positive step in changing the AI narrative” that Microsoft and its ChatGPT-powered Bing search engine are better-positioned to cash in on the AI craze.

Alphabet’s market capitalization swelled by nearly $120 billion over the last two trading sessions, solidifying its place as the fourth-most valuable public company in the world.

Largely reaping the benefits of the stock surge are Google’s billionaire current and former executives who added a total of more than $9 billion, including cofounders and board members Larry Page and Sergey Brin, who added $4.1 billion and $3.9 billion to their fortunes Thursday, respectively.

Fellow Alphabet board members Ravitark Ram Shriram and John Doerr added about $330 million to their combined fortunes Thursday, while early Google investor David Cheriton and former Google CEO Eric Schmidt grew more than $900 million richer.

Forbes Valuations

Page (worth $99.8 billion) and Brin ($95.5 billion) are the seventh- and 10th-richest people in the world, according to Forbes’ real-time billionaire tracker. Page’s fortune surpassed that of Microsoft mogul Steve Ballmer and Mexican media magnate Carlos Slim Helu on Thursday, while Brin’s wealth pile surged past those of L’Oreal heiress Francoise Bettencourt Meyers and financial data king Michael Bloomberg.

Crucial Quote

Alphabet has the “leading collection of AI/machine learning-driven businesses” of any technology company, Goldman Sachs analysts led by Eric Sheridan wrote in a Wednesday note to clients, adding the latest rollout caused the bank to become “increasingly constructive” on Alphabet’s long-term business strategy.

Chief Critic

The freshly announced generative AI improvements are a “positive [step] in the AI battle” against Microsoft, but Alphabet continues to operate in “major catchup mode,” according to Wedbush analyst Dan Ives. Microsoft’s early investment in ChatGPT parent OpenAI gave it a “key head start” in the field that could prove challenging for Alphabet to overcome in the struggle for market share, Ives added.

Key Background

OpenAI’s ChatGPT launched in November to significant fanfare and was integrated into Bing in February, shortly after Microsoft announced it made a multibillion-dollar equity investment in OpenAI. Many considered Google’s early response to the AI-fueled stiffer search competition to be subpar, with Alphabet shares sliding as much as 10% in the months following ChatGPT’s rollout.