Google CEO Sundar Pichai believes the rise of artificial intelligence has opened doors for more startup investments, especially as Alphabet stands to gain potentially $100 billion or more from its 2015 investment in Elon Musk’s SpaceX. “You know SpaceX, Anthropic and so on so, I think now with the AI shift, there are more opportunities on which we can deploy capital in a good way and so we are doing that,” Pichai said during a recent chat with Stripe co-founder John Collison.
Google has always been active in startup investing through its early-stage venture group, GV, and its growth arm, CapitalG. However, with today’s AI companies needing hundreds of millions or even billions of dollars, Google’s parent company, Alphabet, is now joining other tech giants like Nvidia, Microsoft, and Amazon. They are skipping the traditional venture capital route and making large direct investments from their own balance sheets.
Alphabet first invested in SpaceX in 2015, putting in $900 million when the company was valued at about $12 billion. In February, SpaceX merged with Musk’s xAI in a deal that valued the combined company at $1.25 trillion. If Alphabet has held onto all its shares, its stake would now be worth around $100 billion, and this value could increase in the coming months. Last week, SpaceX confidentially filed for an IPO, reportedly seeking a $1.75 trillion valuation, which would be a record-breaking offering.
Then there’s Anthropic, a competitor to OpenAI that also works with Google by agreeing to buy billions of dollars worth of its tensor processing units (TPUs) and cloud infrastructure. In 2023, Google invested $300 million in Anthropic, getting about a 10% stake. Months later, they added another $2 billion. Since then, Anthropic’s value has shot up from single-digit billions to $380 billion as of its last funding round in February, with Google adding more money along the way. In total, Google’s investment in Anthropic now exceeds $3 billion, and they reportedly own a 14% stake.
Pichai’s recent comments suggest that Google might be looking for more outside investments as its AI returns grow. He mentioned that the company aims “to be good stewards of capital.” He added, “To the extent you’re bullish on ROIC, you want to invest every last dollar you can there,” referring to the return on invested capital.
