Staff Expenses at Google DeepMind Rise Sharply Amid AI Boom
Rising Costs at DeepMind
DeepMind, an artificial intelligence lab owned by Alphabet, reported a significant increase in administrative expenditures in their latest financial statements. These expenses grew by £350 million, totaling £1.4 billion for the last year. This surge in costs can largely be attributed to rising staff expenses.
Changes in Employee Costs
Interestingly, this rise in spending marks a change from 2022, when DeepMind successfully reduced employee costs by 39%. The previous year had been tough, with a reported profit drop of 40%, mirroring the broader trend of layoffs and budget cuts across the technology sector following the pandemic.
For the last financial year, staff costs and related expenses notably increased by £231 million, bringing the total to £826 million. Despite this rise, the figure is still lower than the 2021 costs, which stood at £969 million.
Key Figures:
- Administrative costs rose by: £350 million
- Total administrative spending for the year: £1.4 billion
- Staff costs for the last year: £826 million
- Staff costs in 2021: £969 million
DeepMind’s Growth and Revenue
DeepMind’s financial performance has also shown some resilience. The company reported a substantial increase in sales, rising by £450 million to surpass £1.5 billion. Pre-tax profits saw improvement as well, climbing to £148.4 million, up from £72.8 million in 2022.
Additionally, DeepMind distributed a dividend of £175 million for the year, a contrast to the previous year when it paid no dividends. They also paid £35 million in taxes, an increase from £12 million in 2022.
About DeepMind
Founded in 2010 by Sir Demis Hassabis, Shane Legg, and Mustafa Suleyman, DeepMind specializes in creating AI systems and conducting research that benefits other divisions within Alphabet and external clients. Google acquired DeepMind for £400 million in 2014, and the lab has since been at the forefront of numerous AI breakthroughs.
Among its notable achievements is the AlphaFold project, which predicts protein behaviors, potentially aiding in areas like antibiotics, cancer therapies, and materials science. Moreover, DeepMind also developed AlphaGo, the first AI to defeat a world champion in the game of Go. Recently, they introduced AI robotic hands, which allow robots to use both hands for tasks in a manner similar to humans, such as tying shoelaces.
Mission and Future Outlook
DeepMind’s mission is to develop AI technologies responsibly to improve the lives of billions worldwide. As interest in AI grows, there is an increased focus from governments on ensuring that these technologies are implemented ethically and responsibly. For instance, the UK government has proposed legislation for advanced AI models, while the European Union has already established an AI Act.
In their recent reports, DeepMind acknowledged that evolving regulations might impact their revenues due to compliance costs. They described the development of AI systems as part of an emerging market characterized by constant change and fierce competition.
During the Times Tech Summit, Hassabis projected that artificial intelligence with general cognitive abilities might be achieved within the next ten years, emphasizing the company’s aim to create an AI system that can perform any cognitive task like a human would.
Academic Contributions
DeepMind remains committed to contributing to academia, having donated £14.4 million in academic support and sponsorships last year, a notable increase from £9.9 million in the previous year.
