Welcome back to the Deep Dive. Today, we're not
just looking at a major corporation. We're examining
an entire economic ecosystem. It's so vast, so
complex, and so ambitious that its operations,
well, they span from trying to cure aging all
the way to designing quantum computers. We're
plunging into the structure, the ambition, and
the deep, pervasive legal challenges of Alphabet
Inc. And we are doing this at what is an absolutely
staggering moment in the company's trajectory.
It really is. To give you a hook right out of
the gate, Alphabet just recently, on September
15, 2025, it achieved a financial feat that only
three other companies have ever managed. Right.
It became the fourth company in the world, trailing
only Nvidia, Microsoft, and Apple, to top the
monumental $3 trillion market cap. And that figure
isn't just a number, you know, it's a declaration,
a declaration of power and maybe more importantly,
of investor belief in its future dominance. So
our mission today is to look far beyond the search
bar, far beyond the core Google products that
made them famous in the first place. Exactly.
We need to uncover the intricate holding company
structure that even makes the scale possible.
We need to look at the audacious moonshot projects,
what they call the other bets, the source of
its seemingly limitless financial. power and
critically, the intense ethical and legal headwinds
it's facing pretty much all across the globe.
It's a study in corporate dichotomy, really.
You have this unparalleled innovation married
to just inescapable scrutiny. So for that foundational
snapshot, Alphabet Inc., it's the American multinational
technology conglomerate, a holding company headquartered
out of the famous Googleplex in Mountain View,
California. And structurally, it's a giant. While
it's always vying for that top spot, it currently
stands as the world's third largest technology
company by revenue. Yeah, just a step behind
Amazon and Apple. But here's the interesting
financial twist. When you measure it purely by
annual profit, Alphabet is actually the largest
technology company in the world. So the money
-making machine is remarkably efficient. Incredibly
so. And the specific date we're focusing on for
its creation is October 2. 2015. That's the moment
it was formally founded through that big restructuring
of Google. Right. And for those of you tracking
the markets, you know the stock. It trades on
the Nasdaq Google GL for the class A voting shares
and GOG for the class C non -voting shares. It's
a foundational pillar. I mean, it's integrated
into both the S &P 500 and the Nasdaq 100. And
that dual class structure you just mentioned,
that's actually a hint of the whole philosophical
structure we're about to explore. OK, let's unpack
this creation story. Because it's not just some
historical footnote, right? This move in 2015
was, well, it was a fundamental, strategic, and
philosophical divorce. It really was. So what
was the core motivation that drove the founders,
Larry Page and Sergey Brin, to carve up Google
into this new conglomerate, Alphabet? Why not
just keep everything under the Google banner?
The primary motivation, and this is coming from
Larry Page himself in the founding letter, it
really revolved around two core principles, autonomy
and accountability. Autonomy and accountability.
Yeah. For years, Google had been operating under
this one enormous, ever -expanding roof. As Page
put it, they wanted to make the core Google business
cleaner and more accountable. So basically, the
search engine, the advertising machine. It needed
a singular focus. Precisely. You can imagine
the management challenge, right? When the search
engine team is sharing a budget with a company
that's trying to extend human life and another
one that's building self -driving cars, the focus
gets, well, it gets diluted. Yeah, us too. So
the new structure was designed to give greater
operational autonomy to those other group companies,
the ones operating outside of the core internet
services, what they now call the other bets.
Those moonshots. Those moonshots. Page noted
that these projects were, quote, pretty far afield
of our main internet products. By moving them
out into their own independent subsidiaries under
the Alphabet umbrella, they gave them what he
called more management scale. And what did that
mean in practice? More management scale. It means
Calico or Waymo could now recruit their own specific
CEOs, establish their own financial reporting
and just pursue their missions without being
constantly constrained by the quarterly demands
and the huge advertising infrastructure of Google.
So it wasn't just a physical separation. It was
like a philosophical declaration that these moonshots
deserve to be judged on their own merits. Exactly.
Not just as eccentric hobbies funded by the search
department. Right. By slimming down Google, they...
improved the transparency and oversight of what
we're doing, and that's a direct quote from Paige.
Before Alphabet, if Google had a bad quarter,
you didn't really know why. You wouldn't know
if it was search ads slowing down or if the self
-driving car program just spent a billion dollars
on R &D. You've got it. Now, the performance
of the core business is clearly segmented from
the high risk, high reward bets. And that transparency
was absolutely critical for investors who, frankly,
often dislike the financial opacity of the old
structure. Now, what's fascinating here and what
really gets to the core philosophy of this shift.
is the source of the inspiration. This organizational
model wasn't developed in a vacuum in Silicon
Valley. It came from a very different, much older
school of thought. That's absolutely right. The
philosophical and structural blueprint came from
the unlikeliest of places. Warren Buffett and
his conglomerate, Berkshire Hathaway. Wait, really?
Warren Buffett? Really? Former executive Eric
Schmidt revealed in 2017 that he actually encouraged
Page and Brin to meet with Buffett to study the
Berkshire model. That comparison is jarring.
I mean, Buffett buys railroads and insurance
companies, stable, mature, cash -generating businesses.
Alphabet is funding revolutionary, volatile science
that might not turn a profit for 20 years. Yeah.
Isn't that a superficial comparison? Fundamental.
It sounds superficial on the surface, I agree.
But the insight they adopted wasn't about the
type of business they were buying. It was about
the management structure. The key insight was
the holding company model itself. You know, managing
a sprawling empire made up of these semi -independent
subsidiaries, each led by strong, trusted, highly
autonomous CEOs. So it's about decentralization.
It is. Buffett prioritizes decentralized management
and long -term capital allocation over micromanagement.
That's the ideological. engine. Page and Brin
wanted to replicate that. They wanted to grant
their subsidiary CEOs the freedom to operate,
knowing they were backed by the central financial
strength of Alphabet. They wanted to inject the
long -term patience of Omaha into the fast -moving
chaos of Silicon Valley. That's a perfect way
to put it. That makes the name Alphabet. even
more literal then. It's not just a bet on technology.
It's a bet on superior long -term capital management
trying to achieve an alpha return through that
structural stability. Precisely. It's an investment
philosophy as much as it is a corporate structure.
Now let's look at the legal mechanics of this
shift because this was a huge reorganization
accomplished remarkably quickly and without needing
a messy shareholder vote. How exactly do you
do that? How do you execute a reorganization
of this scale without... the owners the shareholders
approving it it was a bit of a corporate shell
game executed under delaware general corporation
law alphabet is incorporated in delaware which
allows for certain corporate maneuvers without
immediate shareholder approval provided you know
certain criteria are met so what was the maneuver
the key was a reversal of roles google inc was
technically the original owner, a placeholder
subsidiary, which is basically a temporary new
company, was created. Then Google Inc. was merged
into that placeholder subsidiary. So the original
giant Google was just absorbed by a new temporary
entity. That's it. Through this merger, which
is all governed by Delaware law, Google Inc.'s
stock was automatically converted into Alphabet
stock. It was a formal corporate gymnastics routine
that made Google the child and Alphabet the new
parent. Without disrupting the stock market.
Exactly. Alphabet retained Google Inc.'s stock
price history and those familiar ticker symbols,
G -O -O -G, N -G -O -G -L. It created the new
legal identity while maintaining the financial
history for the market. That level of legal and
financial maneuvering is a real testament to
the speed and complexity of big tech. But they
took an even more definitive step a couple of
years later to finalize that legal separation.
They did. In September 2017, they created a subsidiary
known as X66 Homes Holdings, Inc. Now, if you
look at the name... X66, that's the Roman numeral
for 26. The number of letters in the alphabet.
It's a very clever structural Easter egg. Beyond
the clever naming, what was the actual... function
of xxx holdings its function was purely mechanical
and legal this entity was set up specifically
to hold the equity of the various bets calico
waymo x and so on think of it as an internal
corporate trust fund okay so it's a legal wall
it's the final wall of separation by holding
the equity here it formalized the process of
valuing these disparate often pre -revenue companies
and more importantly legally separating them
from the massive liabilities and operations of
google llc It protects the core search business
from, say, a Waymo self -driving accident lawsuit
or a total failure of Calico. It really shows
the immense foresight locking down that structural
foundation right down to the Roman numerals to
guarantee that the structure mirrors the philosophy.
Decentralized autonomy under one controlling
financial umbrella. Right. And moving from those
structural mechanics to the corporate identity,
the very name alphabet. is loaded with layered
meaning. It's designed to communicate both their
mission and their financial goal. It certainly
is. Larry Page laid out that dual meaning. On
the humanistic side, he liked that the alphabet
is a collection of letters that represent language,
which is fundamentally how we organize information.
And of course, organizing the world's information
is the core purpose of Google search. And then
there's the critical financial layer. Page also
explicitly said that they liked the name because
it signifies alphabet. In finance, alpha is the
investment return you achieve above a market
benchmark. So they were signaling to the world
that this new holding company would strive for
investment outperformance, the alpha, through
their ambitious bets. It's a statement of radical
ambition baked right into the name. But there's
always a slightly funnier, more humble anecdote
behind these mythical names, isn't there? There
is, and Eric Schmidt provided it. He disclosed
that the original, highly practical inspiration
for the name actually came from the street address
of one of their European offices. The Google
Hamburg office was located on ABC Stress. So
a $3 trillion global conglomerate is named after
a German street address. It certainly grounds
the mythology a bit. And despite being the company
whose mission is to organize all the world's
information, they ran headlong into a very human
-scale naming conflict. They couldn't even organize
their own digital presence perfectly. It's the
ultimate irony for a search giant. They don't
own the most intuitive domain names. They operate
under abc .xyz using that, you know, relatively
niche .xyz top level domain. Why not alphabet
.com? Because alphabet .com is owned by a fleet
management division of BMW. When the announcement
dropped, BMW immediately made a public statement
saying they'd be closely examining the trademark
implications. And to add to the confusion, they
also don't own ABC .com, which belongs to Disney's
American Broadcasting Company. It's a hilarious,
humbling reminder that even the masters of the
digital universe have to navigate analog reality.
But maybe the most telling identity shift involves
their corporate mantra. Google famously operated
under the unofficial slogan, don't be evil. Right.
That phrase was iconic. It was often cited in
early antitrust debates as a moral compass. It
underwent a subtle but profoundly significant
evolution. When the parent company, Alphabet,
was formally established in October 2015, it
adopted a related but broader motto for its code
of corporate conduct. Do the right thing. That
shift from don't be evil to do the right thing
is fascinating. It sounds less defensive and
more proactive, almost like a statement of intent
to govern. That's exactly the implication. Don't
be evil was a perfect motto for a startup disrupting
incumbents. It was about moral restraint, avoiding
the bad practices of the monopolies that came
before it. But as Google grew into a monopoly
itself, the challenge changed. It did. The new
parent company, Alphabet, is taking on massive
societally defining challenges like curing aging,
building autonomous cities, defining the future
of AI. In those spaces, simply not being evil
isn't enough. You have to make tough, proactive,
ethical decisions about what constitutes the
right thing, often in areas where there's no
established moral or legal framework. So while
the parent company is now focused on this proactive
governance, the original mantra didn't completely
vanish. No. Don't be evil was retained in the
code of conduct of the subsidiary, Google LLC.
So the search engine, YouTube, Android, the services
that touch billions of users and face anti -monopoly
pressure daily, they still operate under that
original defensive umbrella. But the holding
company is guided by the more ambiguous, proactive
mandate of do the right thing. That's the split.
Now let's shift to the people steering this ship.
The senior management structure evolved sharply
in 2019 when the founders decided to step back.
That was a pivotal moment in December 2019. Larry
Page and Sergey Brin jointly announced they were
stepping down from their executive roles page
as CEO of Alphabet and Brin as president. But
they didn't just walk away. Not at all. They
retained their status as employees. board members,
and most importantly, controlling shareholders.
They relinquished the day -to -day administrative
burden, but kept the ultimate voting authority
over the company's strategic direction. It is
the core of their power, enabled by that unique
ownership structure. It is. The executive leadership
was consolidated under Sundar Pichai, who was
already the CEO of Google. He then assumed the
CEO role for the entire parent company, Alphabet.
So he's in charge of both the core business and
all the other bets. Correct. And the operational
stability is further bolstered by figures like
John L. Hennessey, the current chairman since
2018, Ruth Porat as president and chief investment
officer, and Anat Ashkenazi as the CFO. This
team handles the financial strategy and execution.
Speaking of control, let's revisit that unique
ownership and voting power structure. If I, as
a listener, bought 1 % of Alphabet stock, would
I have 1 % of the say in how the company is run?
Absolutely not. And this is critical to understanding
how the moonshots even get funded. While Alphabet
is mainly owned by institutional investors, over
60 % of the shares are held by massive entities
like the Vanguard Group and BlackRock. These
are mostly Class C shares. And Class C shares
carry no vote. Exactly. The Class A shares carry
one vote, but the founders and insiders primarily
hold Class B shares, which carry 10 votes each.
10 votes per share. So what does that mean in
practical terms for the founders? It means that
while Larry Page holds only about 3 .0 percent
of all outstanding shares and Sergey Brin holds
a similar 3 .0 percent, that concentration of
super voting class B stock means they jointly
control the majority of the voting power, along
with a few other insiders. It's an entrenched
structure. It is. It's designed specifically
to insulate the company from short term market
pressures. They have the financial firepower
to fund Calico for 20 years without worrying
that an activist hedge fund is going to force
them to abandon the project next quarter. This
is the structural cost of their revolutionary
autonomy, the centralization of decision making
authority in the hands of the founders. That
structure sets the stage perfectly for exploring
the scale of their ambition in the portfolio.
Alphabet is the parent, but the Google subsidiary
is the absolute financial juggernaut. The engine
funding. everything else. Google remains the
largest subsidiary by far. It serves as the umbrella
for all of Alphabet's core internet related businesses.
This includes the massive, globally dominant
services that generate the vast majority of the
revenue. Right. We're talking about the Android
operating system, which basically controls the
global mobile landscape, YouTube, the dominant
video platform, and of course, Google search
itself, which, as we'll discuss, is the source
of so much of their antitrust scrutiny. And it's
the astonishing diversity outside of this core
that makes Alphabet so unique. So let's delve
into these other bets, the Moonshot portfolio.
These are run by their own CEOs and held to a
high standard. of eventual commercial viability.
These truly are projects ripped straight from
the realm of science fiction. They reveal the
deepest, longest term bets Alphabet is making
on the future of humanity and technology. We
can break down some of the most significant.
Let's start with the one aimed at redefining
human lifespan. That would be Calico, which stands
for California Life Company. Its focus is explicitly
on human health and throwing staggering amounts
of capital at the complex biological black box
that is aging. It's headed by Arthur D. Levinson.
This isn't just incremental health care reform
we're talking about. Not at all. Calico's mission
is radical longevity to fundamentally overcome
the mechanisms of aging itself. The philosophical
weight of a for profit company pursuing immortality.
while it raises profound ethical questions. But
from an investment perspective, the potential
market is literally everyone on Earth. Then you
have the company that is actively transforming
urban streetscapes and logistics right now, Waymo.
Right, Waymo. It's the autonomous driving technology
arm led by Dmitry Dolgov and Takedra Mawakana.
And Waymo is far past the conceptual stage. Oh,
yeah. It has commercial ride -hailing operations
running extensively in dense urban environments
like San Francisco. And the expansion is aggressive.
In January 2024, they filed an application with
the California Public Utilities Commission to
expand their driverless service into Los Angeles.
That expansion into L .A. is huge. considering
the traffic and complexity there. But the whole
autonomous vehicle space is competitive and has
faced some major headwinds. It has. The industry
has been hit by safety concerns, regulatory skepticism,
especially after high -profile incidents involving
competitors like Cruise, GM subsidiary. Waymo's
ability to successfully expand requires overcoming
not just the technological hurdles, but also
the intense public scrutiny and regulatory resistance.
Its success is a crucial test case for whether
Alphabet can turn a moonshot into a a commercially
viable, high -margin operational business. It
really is. And we can't forget the actual incubator,
the central research lab, where all these wild
ideas are born, tested, and sometimes quickly
killed. That's X Development, simply called X.
The dedicated research and development group
for moonshot technologies. It's overseen by Astra
Teller, who famously holds the title of Captain
of Moonshots. And he cultivates a culture of
calculated fast failure. Right. He insists on
it. He talks about identifying and killing projects
that can't scale or aren't viable quickly enough
to prevent them from becoming these zombie projects
that just drain capital without ever achieving
escape velocity. That mentality embracing failure.
is essential to the alphabet isn't it you have
to kill 10 projects to find the one that justifies
the whole enterprise absolutely the closure of
loon llc the internet by balloon project in january
2021 is the perfect example of that ruthless
calculus they were technically successful though
they got internet connectivity via high altitude
balloons they did but the ceo cited a very simple
defining reason for the shutdown they lacked
a scalable and sustainable business model they
proved the concept but they couldn't make the
economics work. So they cut the cord, freeing
up billions of dollars and engineering talent
for other pursuits, like quantum computing or
AI drug discovery. Which brings us to their intensive
work, blending artificial intelligence with biology.
That sector is split into two major companies.
First, you have Isomorphic Labs, launched specifically
to use cutting edge AI for drug discovery. It's
headed by Demis Hassabis, the CEO of DeepMind,
which ensures that Alphabet's foundational AI
research is piped directly into the pharmaceutical
pipeline. The goal being to revolutionize the
decades long multibillion dollar process of drug
development. Exactly. And then there's the broader
health data company. That's fair. Right. Also
deeply focused on human health, but often concentrating
more on medical devices, research tools, and
data analytics, things like continuous glucose
monitoring or clinical trial optimization. It's
managed by Stephen Gillette and operates in the
more immediate health space, contrasted with
Calico's focus on radical longevity. Finally,
let's cover the infrastructure and logistics
bets that underpin the future of commerce and
connectivity. On the logistics side, we have
Wing, which is focused on drone -based delivery
of freight. Headed by Adam Woodworth, Wing is
tackling that critical last mile problem, attempting
to bypass congested roads by using automated
drone fleets for fast, localized package delivery.
And they're operating commercially in several
small markets globally. They are. And on the
connectivity front, you have the project that
directly takes on the incumbent cable and telecom
giants. Google Fiber. Led by Dinesh Jain. providing
internet access via high -speed fiber optic connections.
This is a crucial strategic bet because it controls
the pipes through which all their core data flows.
It competes directly with incumbent ISPs in specific
targeted markets, not only as a profit center,
but also as a way to prove that high -speed competitive
internet is possible. Which pressures the rest
of the market. Exactly. And all this innovation
is fueled and shaped by their internal financial
infrastructure. The investment arms. Absolutely.
Alphabet has two powerful investment arms. Capital
G provides private equity, usually targeting
growth stage tech companies that are already
showing massive potential. Then you have GV,
formerly Google Ventures, which is the venture
capital arm, focusing on early stage seed level
tech companies. So Alphabet is not only developing
its own internal future, but also acting as a
massive venture capital accelerator, actively
shaping the entire technology ecosystem around
it. idea. That portfolio is vast, but as we've
noted, it's highly fluid. What happens when these
experiments succeed or fail to stand alone? When
they mature or overlap with the core business,
they tend to get absorbed back into Google LLC.
We saw this with Nest Labs, the smart home company.
Merged into Google in February 2018. And Chronicle
Security, which merged with Google Cloud in June
2019. Even the ambitious urban planning initiative,
Sidewalk Labs, was absorbed into Google in 2021
after it hit regulatory and pandemic -related
headwinds. So these moves show the system working
as designed. The bets either die off or they
grow up and become part of the cash -generating
core. That's the life cycle. transition from
the corporate architecture and the science projects
to the raw economic power that makes it all possible.
Alphabet's financial scale is truly immense,
cementing its place in that exclusive trillion
dollar club. When you look at the 2024 figures,
you start to grasp the scale. The revenue for
that year hit $350 .2 billion. Yeah. But what
is more telling is their remarkable efficiency.
That generated a net income of $100 .12 billion
against total assets of $450 .26 billion. By
September 2025, they were employing 190 ,167
people worldwide. This is a government -sized
organization operating within a for -profit structure.
It is. But despite the hundreds of projects,
the autonomous cars, the longevity research,
the financial core remains incredibly singular.
It all still comes down to advertising. It does.
This is the central financial paradox of Alphabet.
As of their 2017 annual report, and the figures
have remained broadly consistent, a staggering
86 % of Alphabet's total revenues came from performance
and brand advertising. Meaning AdSense and Google
Ads. It is a dominant financial dependency. Why
is that revenue so sticky? Why is it so hard
for competitors to erode that 86 %? It's due
to entrenched market position, data advantage,
and critically default contracts. Because Google
Search is the default engine on nearly all mobile
phones, especially Android devices, but also
through lucrative deals with Apple, they effectively
capture the vast majority of search intent globally.
And this intent translates directly into highly
targeted advertising revenue. Much of which flows
from international operations, which accounted
for 53 % of the revenue. That ad dominance is
a self -reinforcing financial machine that funds
the entire moonshot apparatus. And that machine
is what allowed them to reach these dizzying
valuation milestones. Let's trace the recent
trajectory into the trillion -dollar club, culminating
in that $3 trillion mark. The initial ascent
was rapid. Alphabet briefly became the world's
most valuable publicly traded company back in
February 2016, momentarily eclipsing Apple before
settling back into second or third place. But
the first major step into that elite financial
realm came in January 2020. That's when it became
the fourth U .S. company to reach a $1 trillion
market value. But the jumps in 2024 and 2025
were fueled by a strategic pivot, particularly
regarding how they treat their massive cash pile.
Absolutely. They crossed the $2 trillion market
valuation threshold for the first time on April
26, 2024. This surge wasn't just about new tech
releases. It was a strong signal of maturity
and investor appeasement. It followed two key
financial announcements. Right. The company's
first... first -ever dividend payout to shareholders,
which thrilled investors looking for passive
income, and a massive $70 billion stock buyback
program. So this signaled that Alphabet was not
just hoarding cash for moonshots. It was willing
to return capital to its owners. Which increased
confidence and valuation significantly. And that
confidence then propelled them to the ultimate
peak in 2025. Correct. On September 15, 2025,
Alphabet officially topped the $3 trillion. This
milestone was driven by the market's continued
enthusiasm for their AI advancements and, importantly,
a more favorable than expected resolution regarding
a major antitrust ruling, which we'll discuss
shortly. Investors basically breathed a sigh
of relief that the ruling did not force a structural
breakup of the company. Now, that market cap
is predicated on the belief that they will continue
to dominate and innovate. So let's look at how
much they actually spend on securing that future.
The investment figures are staggering. In 2022,
Alphabet had the second highest expenditure on
research and development worldwide, amounting
to a colossal 39 .5 billion U .S. dollars. To
put that in perspective, that R &D budget is
larger than the GDP of many mid -sized nations?
It is. They are aggressively pouring money back
into speculative growth areas, proving the Alphabet
isn't just rhetoric. Moreover, they are agile
investors, acquiring seven of their own capital
-backed startups in the 2017 financial year.
year alone, showing they use their investment
arms as feeder mechanisms for internal growth.
But the innovation that really justified the
stock boost and captured the imagination recently
wasn't just incremental AI improvement. It was
a genuine quantum leap. It was a game changer
in quantum computing in late 2024. On December
10th, 2024, Alphabet unveiled its new quantum
computing chip, which they named Willow. This
announcement caused a significant jump in the
stock, reflecting the profound confidence the
market placed in this technology. What made Willow
so transformative? We often hear about quantum
computing, but what was the specific breakthrough
here? The significance wasn't just raw computational
speed, although that was impressive. Willow reportedly
solved a highly complex problem in five minutes,
a task that would require a classical supercomputer
longer than the age of the universe. So what
was the real breakthrough then? The real breakthrough
was in tackling the biggest hurdle in quantum
computing, error correction. Explain why error
correction is such a massive hurdle. Quantum
computers use qubits, which are incredibly sensitive.
Any external vibration, a stray electromagnetic
field, or a temperature fluctuation causes the
system to immediately decohere, meaning the quantum
state collapses and the calculation is corrupted.
So that constant error rate is why practical
quantum computing has been stuck in laboratories.
For the most part, yes. Willow's design reduces
and corrects these error rates in real time,
making the computations stable and reliable for
the first time outside of highly controlled small
scale experiments. If this is truly scalable,
it moves quantum computing from theoretical physics
to practical engineering. And the immediate implications
for the listener are enormous, far beyond the
stock price. Absolutely. Reliable quantum computing
could revolutionize materials, science designing
perfect batteries or superconductors, for instance.
It could radically accelerate drug modeling and
discovery, giving companies like Isomorphic Labs
a colossal advantage. It fundamentally changes
the calculation capabilities of finance, logistics
and encryption. It is a technology that justifies
a trillion dollar valuation jump just on its
potential alone. Yet the very size, dominance,
and technological leap we just discussed inevitably
draw immense legal and ethical scrutiny. That
$39 .5 billion R &D bill guarantees not only
technological leaps, but profound legal battles
over market control. And this complexity is the
often overlooked cost of that $3 trillion valuation.
And the most important current battle is the
antitrust fight here in the United States. Precisely.
The U .S. Department of Justice filed a major
lawsuit in 2020 alleging monopolistic practices,
primarily targeting Google Search's dominance
through anti -competitive contracts. And the
outcome was a landmark moment for the U .S. government.
It was. In August 2024, a U .S. district court
found Alphabet guilty of violating antitrust
law. This was the first antitrust ruling against
a major US company in 24 years, effectively signaling
a renewed government willingness to take on big
tech. What exactly did the court find them guilty
of? The court findings centered on the arrangements
Google makes with mobile device manufacturers
and wireless carriers to ensure Google search
is the default pre -installed search engine.
The court agreed with the DOJ that these lucrative
contracts essentially barred competition from
the market. But the ruling didn't mandate a breakup,
which was the major relief investors celebrated.
Right. It established that Alphabet had acted
unlawfully to maintain its dominance, but didn't
force a breakup. Alphabet has predictably appealed
the ruling, setting the stage for a Supreme Court
battle that will define digital competition for
a generation. But the scrutiny is not confined
to the U .S. This is a comprehensive global issue.
That's right. They face concurrent legal actions
worldwide. In France, they settled an antitrust
suit with the French Autorité de la Concrance
for $270 million in June 2021. Which sounds like
a large fine, but... But it amounted to less
than 0 .7 % of their yearly earnings at the time,
leading to the argument that for Alphabet, fines
are merely the cost of doing business. Furthermore,
Japan launched its own antitrust probe in June
2021, specifically examining Alphabet's dealings
and contracts with Japanese smartphone makers.
Mirroring the U .S. government's focus on mobile
dominance. Exactly. And beyond government regulators,
there have been massive private lawsuits that
highlight the cutthroat nature of the technology
they're developing, specifically in the Waymo
sphere. The famous 2017 legal battle between
Waymo and Uber is a perfect illustration. It
is. Alphabet sued Uber. alleging that proprietary
self -driving car technology, including critical
LIDAR sensor designs, had been stolen by a former
Waymo engineer, Anthony Lewandowski, who then
joined Uber. The case centered on 14 ,000 documents
that Lewandowski was alleged to have downloaded
before he left. That lawsuit went right to the
heart of trade secrecy in Silicon Valley. How
was it finally resolved? It settled dramatically
in February 2018. Uber ultimately agreed not
to use the disputed self -driving technology
and provided Waymo with a Bain point three four
percent equity stake in Uber, which at the time
was valued at approximately two hundred and forty
five million dollars. So while Waymo didn't get
cash, they got a stake in a competitor and a
legal injunction preventing the use of the disputed
tech. And let's not overlook the consumer privacy
angle, which is a constant risk for a company
that relies entirely on user data. They faced
a major class action settlement in July 2020
related to a privacy bug in Google plus Dom.
This bug exposed non -public account data, allowing
app developers access to user information without
proper consent. The class action lawsuit settled
for seven and a half million dollars. Wait, a
settlement for exposing private user data that
touches millions of people resulted in payouts
ranging from five to twelve dollars per claimant.
Yes. That's the reality of large -scale class
action settlements. The total dollar amount sounds
large, but divided among millions of claimants,
the individual payout often amounts to the cost
of a few cups of coffee. Which reinforces that
perception we mentioned earlier, that for companies
of this financial magnitude, privacy fines can
sometimes be viewed as a budgeted operational
expense rather than a catastrophic deterrent.
It's a fair criticism. Shifting to internal affairs,
the company's treatment of its vast workforce
has also drawn intense scrutiny, particularly
following the 2023 mass layoffs. The 2023 layoffs
were widely criticized for their speed and lack
of humanity, especially given the company's incredible
financial health. Alphabet cut 12 ,000 jobs,
which is about 6 % of its global workforce. But
the devastating element wasn't just the cuts
themselves, which were framed by CEO Sun. Arpit
Chai as a necessary adjustment. It was the clinical
execution. Exactly. Many employees, including
long tenured and recently promoted staff, discovered
they'd been terminated only upon losing access
to their company accounts. email, internal systems,
badge access, often overnight or while they were
away from their computers. It was a stark contrast
between the company's philosophical mandate to
do the right thing and the cold automated reality
of a mass termination process. It really was.
And they have also faced explicit challenges
regarding labor organizing efforts and corporate
response to internal dissent. Right. In December
2020, the National Labor Relations Board, the
NLRB, filed a formal complaint against the company.
That's right. The NLRB alleged that Alphabet
Inc. engaged in unlawful monitoring and questioning
of several Google workers and unlawfully placed
employees on administrative leave. These actions
were alleged to be in retribution for employees
engaging in unionization attempts and protesting
company policies. And Alphabet's response? They've
consistently denied these allegations, maintaining
that its internal disciplinary actions were legal
and justified, but the filing itself highlights
the deep friction between labor and management
at the tech giant. We also need to touch upon
the impact of the volatile global political landscape,
most notably the situation in Russia. Alphabet's
operations in Russia were severely impacted starting
in May 2022. Russian authorities seized Google's
local bank account. Since they couldn't access
their funds to pay vendors and staff, the local
Russian subsidiary was forced to file for bankruptcy
a month later. But despite the financial collapse
of the subsidiary, it's a testament to the global
nature of their services that the core free platforms
remained available. They did. Google Search,
YouTube and Gmail remained available to Russian
users. fighting a continued uncensored path for
information. Finally, let's address the most
recent and arguably most controversial corporate
conduct decision in the content space, the reversal
of their longstanding misinformation policy in
2025. This happened in September 2025 and generated
immediate intense controversy. Alphabet announced
it would reinstate YouTube creators who had previously
been banned for spreading misinformation concerning
both COVID -19 and the 2020 U .S. presidential
election. This represents a fundamental shift
away from the stringent content moderation policies
they enforced during those events. What was the
rationale they provided for this significant
reversal? The company cited an appeal process
letter where they alleged that the previous administration
had pressured YouTube to remove certain non -violative
user -generated content that contained misinformation.
So they framed the reinstatement as an action
to uphold free expression. And resist government
overreach in content removal, yes. Emphasizing
their role as a global platform rather than a
curator of factual authority. Yet the resulting
criticism was harsh. Suggesting the policy prioritized
platform openness over verifiable facts. It was.
Critics argued that by reinstating creators who
spread harmful health or political falsehoods,
Alphabet was prioritizing the maximization of
user engagement and free expression over a commitment
to truth and public health. This decision forces
Alphabet to navigate an increasingly thin political
and ethical tightrope. Wrestling between its
original goal of organizing the world's information
and its evolving and contested responsibility
as the primary global steward of media and content.
It's a classic example of do the right thing
colliding with the harsh realities of platform
governance. What an incredible picture we've
painted of Alphabet Inc. We started with a philosophical
reorganization inspired by the structural stability
of Warren Buffett's Berkshire Hathaway, designed
explicitly to grant autonomy to the Moonshot
projects. We've watched that company achieve
a historic $3 trillion market cap on the back
of pioneering quantum chips like Willow and world
-dominant AI. And yet, simultaneously, this same
entity is facing immense global legal scrutiny.
It's been found guilty of antitrust violations
in the U .S., forced into bankruptcy in Russia,
and is settling massive lawsuits that result
in minimal payouts to consumers. Not to mention
wrestling with major internal corporate challenges,
from the lack of humanity in mass layoffs to
these profound, ethically charged questions about
content moderation and the management of global
information flow. It is the ultimate dichotomy.
And just to reiterate that scale, as of September
2025, Alphabet employs 190 ,167 people managing
a portfolio that stretches from solving the errors
in quantum computing and running drone delivery
services all the way back to the simple search
engine that indexes language itself. So we return
to the structural contradiction at the core of
Alphabet. The entire organization was engineered
to allow the Alphabet's Calico Waymo X the autonomy
to pursue revolutionary science insulated from
short -term market noise. But we established
that over 80 % of Alphabet's actual realized
revenue still relies on its core advertising
business, that single Google search subsidiary.
Which leads us to the fundamental provocative
question for you, the listener, to mull over.
If the entire revolutionary autonomy of Alphabet
is financed by a single advertising dependent
cash cow, how long can the Alphabet truly afford
to fund moonshot projects that operate so far
afield of the Internet? And what is the true
structural cost of their revolutionary autonomy
if the entire foundation rests on one financial
pillar? That structural dependence is the deep
dive for another day. Thank you for joining us
on this exploration of Alphabet Inc.