Kathmandu. For the last 2 years, the AI world has been telling the same story: “Whoever learns AI will conquer the world.” Every country, from the US to China to South Korea, is spending billions of dollars on AI. Investors also believed that AI companies would generate the biggest revenue in the future.
This expectation led to a steady rise in the tech company’s share price. However, on June 22, something unexpected happened. Which exposed the entire AI world. The incident also snatched the fresh from Elon Musk, the world’s first billionaire.
Shares of the world’s biggest AI companies fell in a single day. Nvidia lost about $200 billion. Amazon’s share price fell nearly 5 percent. Meta’s share price also fell 2 percent. Shares of Google’s parent company Alphabet also saw selling pressure. It lost about $270 billion in its market capitalization.
Stock markets around the world were in turmoil. It wasn’t just a question of why the share price fell. The real question was, what happened that shook up the entire AI sector?
The most amazing thing was that there was no major war. There were no major changes in interest rates, and there were no government restrictions on AI. But when the real reason was revealed, the whole world was shocked.
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The real story began on June 16. Noam Shajir, Google’s most talented AI researcher, announced his decision to leave the company and join OpenAI. Noam Shajir is the same scientist who co-authored the landmark 2017 Transformers paper. This transformer technology is considered the foundation of ChatGPT, Gemini, Cloud, and almost all advanced AI models today. While this news was coming in the market, another big news came on June 19.
John Jumper, a well-known Google DeepMind scientist and Nobel laureate in chemistry, also decided to leave Google and join Anthropic. Both reports came out over the weekend. As soon as the market opened on June 22, investors began selling shares of Alphabet. Within hours, the company’s share price fell about 7.2 percent in intraday trading. That was the biggest drop in more than 1 year.
Two employees resign to $250 billion SWA
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The biggest question is, how can AI companies suffer such a huge loss due to two employees changing jobs? A typical employee leaving a job rarely affects a company’s share price. But this was not a matter of ordinary employees.
Noam Shajir and John Jumper are one of the chosen scientists in the AI industry. Whose research is propelling the entire industry. Interestingly, Google spent about $ 2.7 billion to hire Noam Shajir two years ago. His departure to OpenAI was a big blow to investors after spending so much money on a Character AI deal and bringing his team back.
This sent the wrong message to investors and reduced their trust in Google. Investors realized that if Google couldn’t retain even its most valuable AI talent, it could fall behind in the future AI race. This is where investor confidence began to waver.
What was the world market worried about?
The real concern wasn’t just the departure of the two scientists. The fear was whether the AI industry was really running under the guise of a select few? If today a Google scientist leaves OpenAI, tomorrow an Open AI scientist moves to another startup, and then an Anthropic scientist moves to a new company, will there be the same impact on the market?
There is another interesting aspect to this incident. Google’s stock declined, but OpenAI and Anthropic were not negatively affected. The reason is clear: both companies are still private companies. Their shares are not listed on the market. So investors can’t sell them. Instead, both companies benefited. OpenAI hired Noam Shajir, one of the leading AI scientists, and Anthropic managed to attract talent of similar caliber.
In addition, two more scientists involved in the development of Gemini, Jonas Adler and Alexander Pritzel, have also announced their departure and are joining Anthropic. This means that Google has lost top talent. However, its rival companies have taken advantage.
Big blow to Elon Musk
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Elon Musk is a leading optimist about AI. He continues to say that there will be millions of humanoid robots in the world. It will make people’s lives easier. However, such shocks in the stock market have weakened investor confidence. Shares of SpaceX fell nearly 16% on June 22. The company lost $ 600 billion in three days. This has prevented Musk from entering the billionaire club. –Agency
