Alphabet joins the Dow Jones but loses $250 billion in market capitalization amid an AI talent crisis.
This week marked a landmark event for the stock market: Google's parent company, Alphabet (GOOGL), officially joined the Dow Jones Industrial Average index, replacing telecommunications giant Verizon Communications as of June 29. However, this historic move for the "blue chips" coincided with a dramatic drop in Alphabet's stock, triggered by internal issues in the field of artificial intelligence.
Index reshuffle: symbolism and reality
The decision by S&P Dow Jones Indices to replace Verizon with Alphabet was made on June 23. Verizon's weight in the index was only 0.5%, as its shares were the cheapest among the 30 components. The inclusion of Alphabet, whose shares trade significantly higher, radically changes the weight of the technology sector in this conservative benchmark. This is not just a technical adjustment—it is a recognition that the economy of the future is built on cloud computing, digital advertising, and, above all, AI. Amazon, Apple, and Microsoft had already entered the index; now Alphabet has joined them, finally pushing the last representative of the telecommunications industry out of the Dow Jones.
Double blow: departure of a Nobel laureate and the author of "Attention Is All You Need"
However, the news of inclusion in the Dow Jones could not prevent Alphabet's stock from collapsing. In a single trading session, the company's shares plummeted by 6%—the worst result in the past year and the sharpest drop since February. Alphabet's market capitalization shrank by nearly $250 billion.
The panic was caused by two high-profile losses in the AI development team. First, on June 18, Noam Shazeer—co-author of the revolutionary 2017 paper "Attention Is All You Need" and one of the lead architects of the Gemini model—announced his departure to OpenAI. Recall that less than two years ago, Google paid about $2.7 billion to bring Shazeer back from Character.AI. Then it became known that 2024 Nobel Prize winner in Chemistry John Jumper, creator of AlphaFold, is leaving Google DeepMind after nearly nine years of work and moving to Anthropic.
This double blow—the loss of two key figures in AI—became a worrying signal for investors, outweighing the positive news of inclusion in the prestigious index.
My view
Alphabet's inclusion in the Dow Jones is undoubtedly a recognition of its scale and dominance. But the talent crisis we are witnessing is not just a "brain drain." It is a signal that even giants like Google can lose their competitive edge if they fail to retain top specialists. The market evaluates not only current positions but also the company's ability to lead in the future. The departure of the creator of AlphaFold and one of the architects of Gemini is a loss that no place in the ranking can compensate for.