Alphabet joins the Dow Jones: a historic moment amid the AI division's staffing crisis
This week marked a landmark event for the stock market: Alphabet Inc. (GOOGL) officially joined the Dow Jones Industrial Average. Starting June 29, the Google parent company will replace telecommunications giant Verizon Communications in the "blue chips," whose share in the index was only 0.5%. The decision by S&P Dow Jones Indices, made on June 23, reflects deep structural changes in the U.S. economy: traditional sectors are being replaced by technology giants.
However, simultaneously with this historic step, Alphabet faced a serious internal crisis. The company's shares plummeted by 6% in a single trading session — its worst performance in nearly a year and the sharpest drop since February. Alphabet's market capitalization shrank by almost $250 billion. The reason: two high-profile losses in its key artificial intelligence division.
Two resignations that shook Google DeepMind
On June 18, Noam Shazeer — co-author of the revolutionary 2017 paper "Attention Is All You Need" and one of the leaders of the Gemini project — 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, on June 20, it became known that John Jumper, a 2024 Nobel laureate in chemistry for developing AlphaFold, is leaving Google DeepMind after nearly nine years of work and moving to Anthropic.
These losses are not just personnel changes. They involve two key figures at the origins of modern approaches to AI. The departure of such specialists signals systemic problems within Google: the company is losing control over talent retention at the height of the artificial intelligence arms race.
What inclusion in the Dow Jones means
S&P Dow Jones Indices emphasized that the decision was driven by Alphabet's strong positions in technology, digital advertising, cloud services, and AI. After Verizon's exit, the Dow Jones lost its last representative from the telecommunications sector and became an even more "tech-heavy" index. Earlier, in 2024, Amazon joined it, while Apple and Microsoft were already members. Now Alphabet has joined them.
Inclusion in the Dow Jones is undoubtedly a recognition of Alphabet's scale and influence. But as June 29 approaches, the company is facing a serious personnel crisis that cannot be resolved simply by being part of a prestigious index. The market has already reacted with a $250 billion drop — and this is just the beginning.
My analysis: Alphabet receives a "golden ticket" to the Dow Jones, but the price of this ticket may be higher than expected. The departure of key specialists to OpenAI and Anthropic is not just a loss of talent but a direct threat to Google's leadership in AI. Investors should closely monitor how the company addresses this issue in the coming quarters. Without a strong team, even a place in the most prestigious index does not guarantee growth.