Modern Management Method: Google Struggles with AI. Punt
August 27, 2026
Another dinobaby post. No AI unless it is an image. This dinobaby is not Grandma Moses, just Grandpa Arnold.
I love it when former blue-chip consultants demonstrate the wisdom, value, and insight of their management methods. I think we have a wonderful case study for business schools (if anyone will get an advanced degree when an LLM can output the answer for a few bucks a month).
I noted that Jeff Dean and Sanjay Ghemawat bailed out of the Google. With that departure the generators of more than 120 patents left Mother Google. Did she shed any tears? Nope. That is not the way of a tough old person like Mother Google. She was busy reorganizing. The DeepMind thing has been a bit of a problem. There was a human resources issue. Then the DeepMind leader wanted to do deep thoughts, not productization. Some of the professionals have groused about Mother Google and some in London have held signs. (From what I have heard, no one walking past these global wizards paid any attention.)
Thanks, MidJourney. Good enough.
I read “Google’s New AI Head Has Problems to Fix.” Before I offer my unwanted observations, let’s look at the source document.
The first passage I noted was:
The stakes are incredibly high, but all was not well. In a nutshell, the company has been excelling at science and stumbling on execution.
Stumbling is an interesting word. Google has delayed its next-generation model. It wants to create an even more massive infrastructure than it currently has. That need to spend helped create that free cash flow shortfall of $5 billion last quarter. With each new China-linked LLM, Google seems to be struggling to pitch the idea that its reinvention of search is working just swell. Its assertion that it would label AI content seems to be more words signifying nothing to quote a poet who probably wouldn’t be too keen to use an LLM as a writing crutch. Among the BAIT companies (this is my acronym for big AI technology), Google has joined illustrious duo of Grok and Meta as firms with the most work to do in the AI race for mastery.
Google talks a good game, but it is “stumbling on execution.” I agree. But the reorganization happened.
I noted this passage from the write up:
What happened next remains unclear. People close to DeepMind tell me they suspect a fallout between the top brass and that the chess master was outmaneuvered by Koray Kavukcuoglu. Hassabis’ former No. 2 joined DeepMind a few years before it sold out to Google. Today he looks to be on a path to potentially succeeding Pichai as Alphabet’s CEO.
Kavukcuoglu is based in Google’s Mountain View headquarters and was previously its chief AI architect. Now he is a senior vice president of DeepMind. That might not sound like much of a promotion, but it is a classic step up the ladder in Google’s unique bureaucracy. Kavukcuoglu is rid of his reporting line to Hassabis, and is not rooted to DeepMind in the same way he would be if he had been made the unit’s CEO. He now reports entirely to Pichai.
Hassabis, the chess master as he reminds people from time to time, appears to have been mated by the Turkish AI wizard. How will this little drama work out?
I noted this passage as well:
Kavukcuoglu must help Google get its mojo back in AI development. The company’s red tape and perverse incentive structure — rewarding staff for launching new projects instead of nurturing existing ones — kept it from successfully commercializing its research for years.
Okay, I think this helps understand that the blue-chip consultant is doing some deck chair shifting. Too bad about those patenting Googlers departing. I am not sure how many people at Google can set the Big Table or keep Chubby happy. I think this is called technical debt, but maybe not. Maybe technical stumbling?
Now my little-sought observations:
- Google is not weirder than other BAIT outfits. It has had a problem since it borrowed the Yahoo-GoTo-Overture advertising model. Its innovations have failed at a remarkably high level. Google scaled online advertising. Google has scaled email. Google has scaled its cloud business. Google has not scaled its successful productization of its big ideas. How about those Waymos?
- Google’s management methods are interesting. I sold a consulting job to the Google by emailing a picture of my boxer dog. That did it. Was there a formal review of the project? Nope. Was there a lengthy back-and-forth? Nope. Just. Hey, nice dog.
- Google has been lost in its own culture and has, in my opinion, lost its ability to understand what’s being said about its products and services. Can you make Google Maps work when you are driving? Can you figure out what Gemini can do with your Notebooks? Do you know why the browser display jumps around after posing a prompt to Gemini? Have you tried to ask a human Googler a question? Try it sometime.
Google cooked up the transformer and “Attention Is All You Need” idea. It produced interesting results. Too bad that none of the firms using that Google technology is able to demonstrate that it can generate revenue to keep its investors from developing ulcers.
Net net: Google’s new head of AI has some work to do. That may be the understatement of the year.
Stephen E Arnold, August 27, 2026
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