A hot potato: As artificial intelligence companies race ahead in their development of generative AI technology, Google is being left behind by the likes of OpenAI and Anthropic. According to former Google CEO Eric Schmidt, the reason for this is simple: his former company prioritizes working from home and flexible hours for its employees.
Schmidt served as Google CEO from 2001 to 2011 and was executive chairman until 2015. He recently took part in a discussion led by Professor Erik Brynjolfsson and students at Stanford University, where he made his feelings on remote work clear.
Brynjolfsson noted that Google had been a leader in the AI field, with researchers inventing the transformer deep learning architecture in 2017 – the technology powers many of today’s LLMs, and is the T in ChatGPT. But the company has since fallen behind OpenAI and startups such as Anthropic in artificial intelligence development.
Brynjolfsson said he had asked Sundar Pichai about the situation, but the current Google CEO never gave him a “sharp” answer, so could Schmidt offer an explanation?
“Google decided that work-life balance and going home early, and working from home, was more important than winning,” Schmidt said. “And the startups, the reason startups work is the people work like hell.”
Update: The YouTube video of the discussion, which we had embedded, was made private a few hours ago, possibly because of Schmidt’s “work from home” comments. Here’s a clip of the moment.
In a Stanford talk posted today, Eric Schmidt says the reason why Google is losing to @OpenAI and other startups is because Google only has people coming in 1 day per week �’� pic.twitter.com/XPxr3kdNaC
– Alex Kehr (@alexkehr) August 13, 2024
Like many current and former executives, Schmidt seems to loathe the idea of employees working from home. He praised the fact that more workers were being forced back into the office in 2022, claiming it improved professionalism and allowed younger workers to develop their managerial styles.
Schmidt wasn’t finished with his tirade. “I’m sorry to be so blunt, 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.”
It’s worth pointing out that Schmidt is exaggerating for effect here: like many companies, Google requires workers to be in the office at least three days per week.
Schmidt then highlighted Elon Musk as an example of a driven leader who gets the most out of people. In June 2022, Musk mandated that SpaceX and Tesla workers must spend a minimum of 40 hours in the office per week or they would be fired.
The former CEO also talked about the work ethic in Taiwan, especially TSMC, which has a rule that starting PhDs work in the factory on the basement floor. “Can you imagine getting American physicists to do that?” Schmidt asked.
TSMC’s extreme work culture is said to be causing problems when it comes to hiring new staff for its Arizona foundries. Twelve-hour workdays that extend into the weekends, calling employees into work in the middle of the night for emergencies, a harsh management style, and threatening to fire workers for minor infringements are not going over well in the US, leaving the chip maker struggling to fill vacancies with US workers.
