For Google, the Techlash arrived with a vengeance last week. After years of mounting angst about the power of Big Tech, two state-level antitrust suits against the search giant in the US landed on consecutive days, adding to a Federal case launched in October.
The European Commission, which has fought a running battle with Google over a series of competition complaints for the past decade, also upped the ante by proposing sweeping new laws aimed at curbing the power of a handful of dominant tech platforms.
For Sundar Pichai, Google’s chief executive officer since 2015, defending the company against the multiplying legal and legislative threats has become almost a full-time job. He is also ending his first year at the helm of Alphabet, the parent company of both Google and “moonshot” ventures like driverless car subsidiary Waymo.
Honing the diffuse, cash-burning holding company, while at the same time refocusing Google on artificial intelligence, have been less public parts of the job, but could turn out to be more significant.
Like it or not, for Google, government intervention is now an inescapable fact of life. Faced with the inevitable, Mr Pichai’s strategy is clear: to publicly welcome new forms of regulation, while at the same time trying to head off its most onerous effects. The tactic is evident from his response to Europe’s proposal last week for a new Digital Services Act which would put more responsibility on the most powerful tech companies to police their platforms.
“I think it’s an important regulation to think through and get right,” he says in an interview with the Financial Times. “What are the responsibilities on platforms? What is the contract we want to have? Where do there need to be clear processes, more transparency? I think all that makes sense to me. Thinking that through and tackling it, it’s a worthwhile effort.”
When it comes to the details, however, things are unlikely to be so simple. GDPR, Europe’s privacy regulation introduced two years ago, has had the effect of favouring the companies that have amassed the largest troves of data on their own users, like Google. “It shows that for a lot of these things, the answers are nuanced, and regulation can get it wrong,” Mr Pichai says.
And he sounds a warning about one idea floated by the EU: to promote competition by forcing companies like Google to open up some of their data to competitors.
“These are going to be the difficult questions they will have to grapple with,” Mr Pichai says. “Governments need to think through these important principles. Sometimes we can design very open ecosystems, they can have security implications.”
Resisting a break-up
Naturally cautious, Mr Pichai, 48, has the sort of non-confrontational style that makes him well suited to the job at hand — a contrast to Google co-founders Larry Page and Sergey Brin, who made a virtue of their iconoclastic disregard for the expected ways of doing things.
The antitrust challenges piling up against the company, with politicians hinting that they may even try to push for a break-up, provide the most immediate threat. The accelerated switch to digital forms of communication and collaboration during the pandemic, he suggests, may have boosted Google’s economic heft, but it has hardly been alone: “It’s one thing if there’s only one company which is doing well, but that’s not what we are seeing.”
Mr Pichai’s arguments have the well-honed style of a company that has been on the receiving end of antitrust challenges for years — even if US regulators have been late to join the action. One of his main points is that Google’s technology platforms bring broad benefits in the tech world.
Of the Android mobile operating system, for instance, he says: “We are providing a software platform to literally hundreds of handset manufacturers around the world.” Yet the antitrust complaints now pending against the company accuse it of dominating those same informal technology networks, sucking out a disproportionate share of the profits.
“The formula with Google is, they start with open [platforms] and then become closed, they jack up the rent,” says Luther Lowe at Yelp, the local search company that has been campaigning against Google’s tactics for a decade. Android has “increased the chance for developers to write apps”, he says, while at the same time sucking most of the mobile web traffic into Google’s search engine.
Mr Pichai also denies that Google has used acquisitions to build a dominant position. “There have been acquisitions we have said ‘no’ to early on,” he says, without disclosing what these might have been. “There are definitely areas we wouldn’t look at at all, from an acquisition standpoint,” he adds of possible future deals.
His explanation for this forbearance is: “We only want to do acquisitions where we are able to add to innovation,” or something else that would benefit users. “We’ve had that framework for a long time”.
However, Dina Srinavasan, a former ad tech executive who was involved in drafting one of the latest antitrust cases in the US, said the company had used acquisitions as part of a strategy to dominate in all parts of the digital advertising value chain, squeezing out rivals.
Another, somewhat unlikely, defence has been to try to depict the company as an underdog, at least in markets dominated by other big tech platforms. “I look at the dynamism in the market, I look at many markets which didn’t exist . . . There are many areas where we are challengers, be it cloud or be it commerce or be it trying to make a phone.”
These are certainly big markets where Google has struggled to make an impact, including against Amazon and Apple. But with a stock market value of nearly $1.2tn, and a strong grip on online search and digital advertising that are forecast to leave it with revenue of more than $200bn next year, such protestations are liable to ring hollow.
“Google’s a one-trick pony,” says Mr Lowe. “The only way he would even be able to dabble in these fields is the ill-gotten gains of dominating and exploiting search.”
Mr Pichai also downplays Google’s influence over the mass market for digital information. What once sounded like a bold corporate mission for an internet start-up — to “organise the world’s information and make it universally accessible and useful” — risks sounding more sinister when applied to a company with such wealth and power.
“We are still a small part of the overall information ecosystem, anyway you look at it,” the chief executive insists. “If you take an area like video, you look at the amount of players in the market today. And so I think there’s more information than ever before. And that’ll always be true.”
A mark of the backlash has been the mistrust from Republicans in the US around this year’s presidential elections. Mr Pichai seems resigned to the idea that Google has become a perennial target, whichever political party is in power.
“I think information is essential to who we are as humanity,” he says. “And I do think people are always going to have strong views around it. It’s not surprising to me that there is a lot of focus on it.”
He also seems resigned to a continued barrage of complaints over a failure to prevent misinformation spreading online — while still claiming significant headway.
“I think ultimately, it’s humans [who] will design these systems,” he says. “When I look at the progress we have all made in ranking and quality, using AI to calculate some of these things, I think that the pace of innovation is pretty steep. But there are clearly areas where misinformation exists and we have work to do to make it all better. And so both are simultaneously true, I think there’s both a lot of progress and a lot of work that needs to be done.”
If his year has ended under a regulatory spotlight, it began on a very different note. After taking over as head of Alphabet from Google’s founders, he gave Wall Street what it had long been asking for: a more detailed financial breakdown of Google’s various activities.
Mr Pichai and Ruth Porat, the company’s chief financial officer, have also been pushing financial discipline deeper into the group’s disparate projects, in the process preparing the way for what has started to look like a slow-motion unbundling of Alphabet.
Waymo took in outside investors for the first time, while Verily — the life sciences division which had been the first to look beyond its parent for funding — raised another $700m last week. These businesses now have independent boards and Mr Pichai concedes that their investors will want to cash out some day.
“One of the possibilities for some of these things is that they are standalone companies outside [Alphabet],” he says. “We don’t have any specific plans in mind, but it is one of the possible paths. That’s part of the framework that Alphabet is creating, to give that structure. I think it also gives a chance for others to be part of the journey as well.”
It is a different vision to the one laid out by Larry Page, who once told the FT that Alphabet could become a digital-era Berkshire Hathaway, assembling a collection of independently run and unrelated businesses under a loose umbrella.
Mr Pichai is keen to downplay any suggestion of disagreement over Alphabet’s future — and the Google founders, who gave up direct involvement in the group a year ago, are still his bosses, thanks to a separate class of stock that gives them 51 per cent of the votes, despite having less than 12 per cent of the equity.
“I think they always envisioned being able to innovate with the structure,” he says. “It’s not like we have a specific way of doing it. We are looking at what works, and we are adapting to it. That’s how they would approach it — and that’s how I approach it as well.”
There are other apparent changes in direction. Mr Page, while he ran Alphabet, said he saw no underlying technological connection between its different operations: The main determining factor was whether they were bold and potentially transformative enough. Mr Pichai, however, talks of a more coherent AI conglomerate taking shape out of the disparate collection of projects he inherited.
Pointing to Everyday Robotics — a project to build robots capable of handling day to day tasks — he says: “Why does it exist within Alphabet? Because the underlying innovation is going to come from AI. And so we are doing that.”
Announced late last year, the unit was formed from research going on in other parts of Google. “We said, if you want to build a generalised robot that could help with everyday tasks, that’s a hard problem,” Mr Pichai says — something that would have a better chance of success cut off from the more immediate day-to-day business pressures of the internet company.
Challenged about whether Alphabet is still in the business of backing so many “moonshot” ideas, he points to Wing, a drone delivery company that has seen a big pick-up in demand during the pandemic, and AlphaFold, a potential breakthrough in AI understanding of how proteins are formed.
AI is the engine that drives all these projects. That has turned technologies like machine vision into potentially foundational capabilities that underpin much of the work inside Google and the wider Alphabet network of companies.
“Waymo is pushing the state of the art in terms of AI [and] computer vision very, very hard,” Mr Pichai says. “And that applies to robotics. It applies to our search: Over time, it will be based on what you’re seeing, not just what you’re willing to type in.
“In some ways,” he adds, “the future across all of these things is connected. That’s what gives us the comfort to take a long-term view and invest in them.”
A question of ethics
The Google boss’s understated style can belie the scale of this ambition. Technology leaders, like Tesla’s chief executive Elon Musk, often strike a hyperbolic tone when discussing AI, veering towards science fiction when describing the time when machines will surpass human intelligence — a point known as Artificial General Intelligence. Mr Pichai, by contrast, makes it sound like a more routine and prosaic computer science problem.
“I just call it AI,” he says. “AI over time will be more general in nature. I still think we have ways to go — but I think it’s one of the most profound things we are working on.”
Even with Google’s enviable resources and acknowledged lead in the field, however, building the AI machine that Mr Pichai envisages will not be easy. An incident last month highlights the extent of the managerial challenge.
Timnit Gebru, Google’s former co-head of AI ethics, and a rare black female researcher at the company, claimed to have been fired after the company blocked the publication of a report she had co-authored. It raised ethical questions about the use of large, data-consuming language models in which Google is one of the leaders.
Her statement brought allegations that Google was suppressing research into an important ethical question out of self-interest. It also stirred up disquiet internally over the company’s continuing struggles to promote diversity.
“I definitely felt pain and disappointment going through a moment like that,” Mr Pichai says. “I think we have to understand all the circumstances and see what we can learn from there. We don’t always get it, right. But we are, as a company, committed to learning from these moments.”
Nor is it the first time Google has stumbled when it comes to AI ethics. Nearly two years ago, it abandoned a plan to set up an AI ethics board made up of external advisers after internal unrest about its composition.
Mr Pichai points out that the company was one of the first to publicly lay out principles for how it will apply AI, and claims it has internal processes to govern the technology’s use — for instance, choosing not to open up its facial recognition technology for use by other companies.
“Over time we expect there will be important regulation” in this and other areas of AI, he says. The Google boss wants the world to know his company is a responsible steward of some of the world’s most powerful technologies: But in this, as in so much of what it does, he is preparing for a time when it no longer left to exercise that responsibility on its own.