Former Google CEO Eric Schmidt blamed Google’s work-from-home policy as the reason why the tech giant is trailing in the AI race.
A professor asked Schmidt why he thinks Google has lost the lead to startups like OpenAI and Anthropic during a conversation with Stanford University students posted to YouTube on Tuesday.
“Google decided that work-life balance and going home early and working from home was more important than winning,” the former CEO said.
“And the reason startups work is because the people work like hell,” Schmidt said.
Schmidt — who has a net worth of $23.3 billion, according to Forbes — took the helm at Google in 2001, working as CEO until 2011 and then serving as executive chairman until 2015.
He was then a technical adviser at parent company Alphabet, before leaving the company altogether in 2020.
“I’m sorry to be so blunt,” Schmidt told Stanford students. “But the fact of the matter is, if you all leave the university and go found a company, you’re not gonna let people work from home and only come in one day a week if you want to compete against the other startups.”
The Stanford professor, Erik Brynjolfsson, said he asked current Google CEO Sundair Pichai the same question, but he “didn’t really give me a very sharp answer.”
Some studies have found that employees are less productive while working from home — and some have found that bosses “feel” their employees are less productive when working remotely. Other studies have shown the complete opposite.
Google has opted for a hybrid work policy. The tech giant mandates workers come into offices about three days a week, according to its 2022 report.
Hybrid seems to be the popular option. About 74% of US companies reported using or planning to use a permanent hybrid work model in 2023, according to a Zippia report.
Google reportedly told employees via an email last summer it would be tracking badge swipes to monitor in-office attendance.
Return-to-office mandates can often force out employees, with 47% of employees saying they would quit a job if their employer mandated a full-time in-person policy, according to Integrated Benefits Institute research.
But Google isn’t the only tech giant employing hybrid work policies. OpenAI implements the same three-day system as Google, according to a Fortune report.
Google has appeared to be flailing in the AI race. It failed to launch its AI chat bot before OpenAI’s immensely popular ChatGPT.
Its initial rival chatbot, Bard, didn’t prove to be much competition for ChatGPT once it did launch.
And Google’s more sophisticated Gemini still launched with glitches that hindered its ability to generate images, which Pichai said was “completely unacceptable.”
Google did not immediately respond to requests for comment.