- Google wants to “deploy capital in a good way” among early AI startups
- Hidden gem projects cover areas such as data centers in space and quantum computers
- The company invests in third parties when the internal options are not mature enough
The CEO of Alphabet (parent company of Google) has stated that now may be a good time to invest in new start-ups as AI spurs innovation across the board.
“I think now with the AI shift, there are more opportunities that we can put capital to good use,” Sundar Pichai said in a conversation with Stripe co-founder John Collison.
Pichai noted that Google is now ramping up its investments in AI startups, including placing big bets on firms like Anthropic, in a new trend of direct investment — so instead of relying solely on traditional venture capital routes, Google is marking large direct investments from its own balance sheets, as are rivals like Microsoft and Nvidia.
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AI startup boom
Google may be poised to make $100 billion or more on a decade-old 2015 bet on SpaceX, but the recent surge in demand has introduced new challenges. For example, wafer capacity, the speed to permit and build data centers, and persistent memory shortages are expected to continue in 2026, 2027 and beyond.
Pichai explained that these limitations effectively create a cap on how quickly a single company can scale regardless of capital, and therefore AI investment is best viewed as a long-term effort.
For now, Google’s continued strategy is to invest every possible dollar where there is a high return on invested capital. Investing in third parties is also a reflection of Google’s own maturity, with Pichai acknowledging that when internal capabilities aren’t mature enough, the company invests in the likes of Anthropic, SpaceX and Stripe.
Anthropic has received billions in Google investment—the startup has since launched a model so powerful it can’t be accessed by the public, all wrapped up in a way to detect and fix serious software bugs.
The company also continues to invest in “hidden gem” projects including data centers in space, quantum computing, robotics, drone delivery and AI-powered drug discovery – starting small gives way to potentially huge growth.
Looking ahead, Pichai’s comments make it clear that AI is less about individual companies going all-in and more about focusing on individual strengths and investing where others can offer greater opportunities.
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