The analyst argues that Google's recent stock underperformance stems from Gemini visibly lagging the AI frontier, rather than just higher capex or geopolitical events. A key factor cited is DeepMind's internal competition for compute access, which the analyst deems unacceptable given Gemini's foundational role for Google's franchises. Google CEO Sundar Pichai has reportedly committed to prioritizing compute allocation for AGI development at the frontier.
Google's internal compute allocation to DeepMind directly impacts its frontier AI model competitiveness, which the market is now pricing into its equity value.