CB Insights - Industries Disrupted by Alphabet

Alphabet’s Next
Billion-Dollar Business:
12 Industries To Watch 2021
WHAT IS CB INSIGHTS?
CB Insights helps the world’s leading companies make

smarter technology decisions with data, not opinion.
Our Technology Insights Platform provides companies

with comprehensive data, expert insights and work
management tools to drive growth and improve
operations with technology.
SIGN UP FOR A FREE TRIAL

Table of Contents
1. Consumer electronics 6
2. Healthcare 12
3. Next-gen computing 28
4. Transportation 36
5. Energy 42
6. Smart cities 46
7. Travel 50
8. Gaming 54
9. Media 59
10. Banking 61
11. Satellite imaging 64
12. Defense 67
What’s next for Alphabet 70
Alphabet’s Next Billion-Dollar Business: 12 Industries To Watch 3

Alphabet is using its dominance in the
search and advertising spaces — and its
massive size — to find its next billion-dollar
business. From healthcare to smart cities
to banking, here are 12 industries the tech
giant is targeting.
Alphabet is using its dominance in the search and advertising

spaces — and its massive size — to find its next billion-dollar
business. From healthcare to smart cities to banking, here are 12
industries the tech giant is targeting.
With growing threats from its big tech peers Microsoft, Apple, and
Amazon, Alphabet’s drive to disrupt has become more urgent than
ever before. The conglomerate is leveraging the power of its first
moats — search and advertising — and its massive scale to find its
next billion-dollar businesses.

To protect its current profits and grow more broadly, Alphabet is
edging its way into industries adjacent to the ones where it has
already found success and entering new spaces entirely to find
opportunities for disruption. Evidence of Alphabet’s efforts is
showing up in several major industries. For example, the company
is using artificial intelligence to understand the causes of diseases
like diabetes and cancer and how to treat them. Those learnings
feed into community health projects that serve the public and also
help Alphabet’s effort to build smart cities.
Elsewhere, Alphabet is using its scale to build a better virtual

assistant and own the consumer electronics software layer. It’s
also leveraging that scale to build a new kind of Google Pay-
operated checking account. In this report, we examine how
Alphabet and its subsidiaries are currently working to disrupt 12
major industries — from electronics to healthcare to transportation
to banking — and what else might be on the horizon.

1. Consumer electronics
ARTIFICIAL INTELLIGENCE COULD BE THE KEY TO

ALPHABET OWNING THE SPACE.
Within the world of consumer electronics, Alphabet has already found

dominance with one product: Android. Mobile operating system
market share globally is controlled by the Linux-based OS that
Google acquired in 2005 to fend off Microsoft and Windows Mobile.
Today, however, Alphabet’s consumer electronics strategy is being

driven by its work in artificial intelligence. Google is building some
of its own hardware under the Made by Google line — including the
Pixel smartphone, the Chromebook, and the Google Home — but
the company is doing more important work on hardware-agnostic
software products like Google Assistant (which is even available
on iOS).
Google hasn’t demonstrated a strong ability to compete with

Apple on hardware — but in Alphabet’s vision of the next
generation of consumer electronics, AI will be the critical
differentiator, not hardware. Google’s reach through consumer
apps like Maps and Assistant, plus the extensive adoption of
Android, means that Alphabet can ultimately have a disruptive
impact across software and hardware, from TV to voice assistants
to watches to automakers.
Though the company has seen several of its products struggle

or even fail due to tepid public reception or internal management
difficulties — Google Glass, for example — its AI product launches,
like Google Assistant, have shown more promise.
Android is the foundation of Google’s work in electronics. It has

been the best-selling mobile OS every year since 2011, and today
has about a 72% market share in the smartphone market.

WEARABLES
In 2014, Google launched its plan to expand the Android operating

system to a range of other devices, which included a wearables
project called Android Wear (which was rebranded as Wear OS
in March 2018). Google has consistently invested in developing
Wear OS to compete with incumbents such as the Apple Watch.
It deepened its presence in the wearables space when it acquired
Fitbit in January 2021 after more than a year of talks.
Google made one of the most significant updates to Wear OS in the

operating system’s history in March 2021 when it opened Tiles —
at-a-glance cards that display weather forecasts, fitness metrics,
and other data via swipe gestures — to third-party developers for
the first time.
Despite these developments, Wear OS accounted for just 3% of

smartwatch shipments in 2020.

ONLINE TV
Google’s expansion of the Android operating system also included

the Android TV. Android TV succeeded the original Google TV,
which was discontinued in June 2014.
Google revamped Android TV’s interface in February 2021 to

more closely resemble the Chromecast’s Google TV. Given the
similarities and the potential for confusion among consumers, it
seems likely that the two platforms could be merged into a single
service at some point in the future.
Source: The Verge

SMART HOME DEVICES
In 2017, the tech giant released a selection of new “smart” home

devices that are not reliant on the Android ecosystem: the Google
Home, new Chromecast devices, a new VR headset, and a new
Chromebook laptop with built-in Google Assistant.
Google’s growing range of smart-home products has seen

considerable investment and remains one of Alphabet’s strongest
potential growth opportunities, reflecting heightened consumer
interest in smart-home products. Since acquiring Nest Labs for
$3.2B in 2014, Google has developed smart-home products that
encompass remote monitoring and climate control via smart
thermostats, as well as home security devices like cameras and
intruder detection systems.
Google confirmed its plans for a new range of Nest-branded security

cameras in January 2021. The company also plans to further
integrate its smart-home services with its fitness tracking products
by adding sleep tracking functionality to its Nest Hub devices.
Source: Google

VIRTUAL ASSISTANTS
Since its launch, Google Assistant has been rated far more capable
and useful than its main competitors, Microsoft’s Cortana and
Apple’s Siri. Driven by Google’s internal deep learning-focused
Tensor Processing Unit chips (discussed later in Next-gen
computing), Google Assistant is available on all Android and
Google Home devices and runs on a reported 1B devices. Android
itself is running on more than 2.5B devices today, while Wear OS is
available on smartwatches from companies like Michael Kors, LG,
and more.
Google has invested heavily in its voice recognition technologies

to retain its competitive edge. It has focused particularly on the
nuances in natural-language processing (NLP) technologies
that allow Google devices to learn the idiosyncrasies of users’
speech for challenging words such as certain names and common
mispronunciations of everyday words.
Now automakers are coming to Google for help building out

software for their in-car infotainment systems. Volvo, General
Motors, Fiat Chrysler, and Nissan will all be working with the
company to integrate Google Assistant, Google Maps, and Google
Play Store into upcoming makes and models:
• Fiat introduced a special edition of the classic Fiat 500 in

March 2021, known as the Fiat 500 Family Hey Google, which
features heavy integration with Google Assistant.
• Volvo’s forthcoming 2022 XC60 also features extensive

integration with the Android ecosystem.
• In February 2021, Ford signed a 6-year exclusivity deal that

will see Google provide all in-car connectivity services to the
automaker, including Google Assistant, Google Maps, and
apps via the Google Play store.

• Nissan’s NissanConnect Services also rely heavily on Google’s
virtual assistant technologies, offering motorists remote
access to their vehicles and other connected services via
Google Assistant.
This approach is Google’s trademark play in consumer electronics:

not building its own branded products, but building software that
powers compelling consumer electronics products. Consumer
demand puts pressure on watchmakers, automakers, and other
companies to integrate tools like Google Assistant and Google
Maps into their products. Even Microsoft adopted Android in its
Surface Duo device, which launched in September 2020.
With Android’s flexibility and reach, it can extend its software to

a wide range of devices from different manufacturers. At present,
Android is compatible with more than 500 models from 60 vehicle
manufacturers.
In this sense, Google’s disruptive potential may have less to

do with knocking out Huawei, Samsung, and other traditional
electronics manufacturers and more to do with owning the
software stack that makes those electronics work.

2. Healthcare
ALPHABET IS FOCUSING ON PARTNERSHIPS AND LEVERAGING

MACHINE LEARNING TO TACKLE A WIDE RANGE OF
HEALTHCARE ISSUES.
One of the industries that Alphabet is most engaged in today — and

where it has the highest likelihood of having substantive effects on
the world — is healthcare.
Alphabet is learning from the mistakes it made trying to go it alone

in the healthcare space. Today, Alphabet is partnering with major
institutions, focusing more on realistic applications rather than
moonshots, and working on a wide range of solutions to different
health problems. As shown below, work on these disease spans
organizations under the Alphabet structure.
It might seem like a distraction for a company like Alphabet to

invest so much in a field like healthcare — at least compared
to autonomous cars, where it has a clear technological and
engineering head start.

But healthcare presents numerous $100B+ market opportunities,
including pharmaceuticals, cancer research, and diabetes
treatment — and Alphabet is betting that its superior machine
learning capabilities and culture of innovation can allow it to find
at least a few winners.
Google’s earliest attempt to disrupt healthcare was hamstrung

by process issues and difficulties integrating with legacy tech.
Google Health, founded in 2006, was a personal health record
(PHR) service, which aimed to connect doctors, patients, and
pharmacies. The main problem it faced was that it couldn’t pull
in external data from a wide variety of third-party providers,
which made it hard for most patients to use, and the service was
discontinued in 2012.
Google also has a neural network patent that uses AI to help

physicians diagnose patients by standardizing clinical notes and
assessing disease risk.
Today, Alphabet’s focus is on forming valuable partnerships and

applying its strengths — machine learning, artificial intelligence,
robotics, and data — to a range of problems. At present, life
sciences companies represent more than one-third of GV’s entire
portfolio, signifying how fundamental healthcare is to Alphabet’s
growth plans.
For example, Alphabet has run several AI-focused healthcare

projects through its DeepMind subsidiary since 2016, including
tests to better diagnose breast cancer and eye disease. Meanwhile,
Calico — a life sciences company that became an Alphabet
subsidiary in 2015 and remains one of Alphabet’s closest-guarded
secrets — is focusing on how AI can help extend the human
lifespan and slow down the aging process.

Through Verily, Alphabet is working on applying technology to
a broad array of life sciences issues, with separate projects
dedicated to studying diabetes, cancer, wearables, robotic surgery,
population health, and pharmaceuticals. Verily raised $700M in
December 2020. Its Baseline clinical research platform supported
the screening and testing of more than 2M people at 351 testing
locations across the US during the Covid-19 pandemic.
Alphabet is working in partnership with existing institutions in

these fields around the world, resulting in numerous clinical trials,
patents, scientific papers, product launches, and community health
initiatives. This suggests that Alphabet takes healthcare seriously
as a pillar of its future portfolio.

DIABETES
So far, diabetes has been one of the most productive fields of

inquiry for Verily, generating a series of pilots and relationships
that have resulted in several clinical trials of its technology.
Verily partnered with Nikon subsidiary Optos to work on better

detection methods for early diabetic eye disease in 2016. In 2019,
the companies announced that the first clinical trials of their
machine learning algorithm for detecting diabetic retinopathy were
live in Aravind Eye Hospital in Madurai, India.
With this technology, a technician takes a photo of the patient’s

eyes and uploads it to the Verily algorithm, which immediately
screens for diabetic retinopathy and diabetic macular edema.
The technician can then refer the patient to an eye care physician
if necessary. On December 18, Verily announced a similar
partnership with Thailand’s Rajavithi Hospital.

In 2016, Verily formed a new company, Onduo, with the drug
manufacturer Sanofi. Though Sanofi restructured its role in the
joint venture in 2019 amid a change in corporate strategy, it is
staying on as a financial backer. Onduo’s offerings include a
mobile app that analyzes glucose data from a cellular-connected
blood glucose meter and photos of patients’ meals to provide
nutritional guidance and insights.
The Onduo for Diabetes app includes access to past glucose

readings and data, as well as the ability to reach out to a
personalized care team for more information. In 2018, the
company announced a plan to develop a new type of “all-in-one”
insulin patch pump that’s simpler to use for patients.
In 2019, Onduo partnered with Orpyx Medical Technologies to make

the SurroSense Rx system available to certain members of the
Onduo diabetes management program. The system consists of a
thin wearable that goes inside a patient’s shoes and alerts them
when hazardous levels of pressure have been reached, helping to
protect them from foot ulcers and issues that can lead to limb loss.
In August 2020, Onduo published a whitepaper on the benefits

of continuous glucose monitoring (CGM) technologies within the
context of its virtual care model. The paper detailed the various
clinical outcomes of using Onduo’s technologies among research
participants, including an average weight loss of 9 lbs, improved
blood pressure, and reduced cholesterol. Onduo’s approach
aligns with broader developments in the healthcare sector that
prioritize personalized medicine and tailor treatment regimens for
individuals living with chronic diseases.
All of these efforts could be extremely valuable for Verily and for
Alphabet as a whole. The global market for diabetes devices is
projected to be worth $38B by the year 2026, propelled mostly by
increasing incidence of the disease.

In December 2020, Google entered into a 6-year arrangement
with insurer Highmark Health, in which Highmark will use Onduo’s
virtual care model to engage with patients living with conditions.
This kind of arrangement could become routine for Alphabet’s
various healthcare subsidiaries as insurers and clinicians seek to
improve patient outcomes with technology.
That said, Alphabet isn’t the only company working on diabetes.

Amazon, for example, is selling blood sugar monitoring devices
directly to consumers and using Alexa to make it easier for
diabetic patients to understand their current health. Meanwhile,
Apple is more focused on creating integrations between existing
diabetes devices and the Apple Watch and iPhone.

ROBOTIC SURGERY
Verily has identified another big opportunity in robotic surgery, a

discipline similar to telemedicine designed to make surgery more
accessible to parts of the world lacking in physicians and doctors.
The surgical robotics market is worth approximately $35B,
representing a significant opportunity for Verily.
Working with Johnson & Johnson, Verily launched Verb Surgical, a

company with the aim of “changing the future of surgery to enable
better patient care,” in 2015.
Verily’s robotic surgery patents show that the company has made
significant progress in developing tools for doctors to conduct
tests remotely. One patent describes an abdominojugular reflex
test, which Verily claims can be performed more accurately using a
pressure cuff and camera than by an in-person physician.
At the end of 2019, Johnson & Johnson announced that it would

be acquiring the remaining stake in Verb Surgical, bringing the
team and technology onboard as it continues working on the mass
rollout of surgical robotic techniques.

COMMUNITY HEALTH
While much of Alphabet’s work in healthcare has focused on

using AI and other advanced technologies to investigate specific
diseases and improve treatment delivery, Verily and Sidewalk
Labs have run projects exploring more local initiatives aimed at
improving the health of entire communities.
In February 2019, Verily launched the OneFifteen project, a not-for-

profit treatment center dedicated to studying opioid addiction and
helping treat addicts in Dayton, Ohio.
The project also aims to generate data on which environments

are best for treating addiction, what kinds of additional care are
useful (including “recovery housing and vocational training”), and
what types of in-person treatment are the most effective at helping
addicts stay clean.
The Sidewalk Labs-incubated Cityblock Health started as

a research project focused on the effects of urban living
environments on health, then pivoted to setting up in-person
“health hubs” in areas with high percentages of Medicaid and
Medicare customers.
Today, Cityblock Health assists low-income patients with

accessing care, and helps care providers better serve them. The
company focuses on high-risk beneficiaries because this relatively
small group of benefits recipients drives “the majority of the
healthcare costs for Medicare and Medicaid” in the United States.
In April 2019, Cityblock raised a $65M Series B funding round from
Redpoint Ventures and 8VC, among others. Cityblock raised an
additional $192M as part of its Series C round in March 2021. The
company will use the funding to expand its community-based care
model across the US. Cityblock’s approach has already yielded
promising results, with a 15% reduction in emergency room visits
and a 20% reduction in in-patient hospitalizations among its first
member cohort.

But Alphabet’s efforts to help broader populations of patients have
not been uniformly well-received. For example, in November 2019,
the Wall Street Journal reported that the medical records of millions
of American patients had been made available to Google without
their knowledge or the knowledge of their doctors. The records
were released as part of a collaboration — code-named Project
Nightingale — between Google Cloud and Ascension, a healthcare
system made up of 2,600 medical facilities across 21 states.
Revelations about the depth and detail of the data that was given
to Google — including patient names, dates of birth, hospitalization
records, immunizations, and more — triggered the beginning of
a federal Health and Human Services inquiry. It also prompted a
Google whistleblower to write an editorial on their concerns
about the project’s HIPAA compliance, which was published in
The Guardian.

CANCER
Alphabet’s DeepMind and Verily have both run projects over the last
several years dedicated to identifying and treating various types of
cancers.
DeepMind announced in 2017 that it had successfully trained a

set of algorithms to analyze images of breast tissue and identify
tumors with about 92% accuracy.
In 2019, the Google Health team published a paper in Nature

demonstrating the technology’s ability to spot breast cancer on
a larger, more conclusive dataset — namely, mammograms from
91,000 women in the UK and the US.
During this study, DeepMind’s software reduced the incidence of

false positives — an endemic problem in traditional mammogram
screenings — by 5.7% among US participants. It also reduced the
incidence of false negatives by 9.4% among US participants.
In July 2019, both Verily and GV took part in the $160M Series B
round for Freenome, a San Francisco-based startup working on
an early cancer detection screening system that uses machine
learning to find markers of cancer in the blood before conventional
tests can detect them. GV also participated in Freenome’s $270M
Series C round led by Bain Capital Life Sciences in August 2020.

WEARABLES
Verily is also exploring applications of wearables in the healthcare

space. Its Study Watch, a biometric data-gathering wearable,
received its first round of FDA approval in January 2019.
The device — specifically its electrocardiogram (EKG) feature —

has been used in studies run by Verily and its partners since April
2017, and is now available more widely on a prescription basis.
About 10 months after the Study Watch was approved by the FDA,
Google announced its $2.1B acquisition of Fitbit — a deal that
wouldn’t be completed until January 2021. This gave Alphabet a
consumer launchpad for its health monitoring technology and a
potential vantage point from which to take on its main competitor
in the wearables space: the Apple Watch.
Verily has made progress, but still lags behind Apple, which has
been focused on incorporating healthcare features in the Apple
Watch for years. In early 2020, Verily received additional FDA
clearance for its “Study Watch With Irregular Pulse Monitor,” a
version of its previous Study Watch that gives users the ability
to monitor for arrhythmia. This feature made waves when it was
first introduced into the Apple Watch in late 2018. Patents suggest
Apple is working on even more advanced health features for the
Watch, including noninvasive glucose monitoring, which is expected
to be included in the Series 7 release in 2021.

PHARMACEUTICALS
With its legacy systems, high margins, and middle men, the
pharmaceutical industry presents numerous $100B+ opportunities
for Alphabet.
Verily’s Project Baseline started in 2017 as an attempt to change

the way that the $50B clinical trial space works.
Traditionally, a clinical trial requires a control group and an

experimental group. The idea behind Project Baseline is to use
the Verily Study Watch to crowdsource health data from 10,000
volunteer patients on a daily basis for five years, thus creating a
kind of “universal control” that would eliminate the need for future
control group testing.
Creating a universal control and monitoring people’s health on a

daily basis, rather than just during a clinical study, means running
trials can be more convenient for patients and analyzing the results
can be easier for companies.
Four of the largest pharmaceutical companies in the world —

Novartis, Otsuka, Sanofi, and Pfizer — joined the Project Baseline
initiative in May 2019, with the aim of using its data to run more
efficient clinical studies in areas like cancer and mental health.
While studies have been run on similar or larger scales in the past,
no study has ever looked into this volume of people at this level of
detail — including sleep, emotional health, heart rate, the genome,
blood, tears, urine, and more — according to Stanford cancer
researcher Sam Gambhir.

AI
While most of Alphabet’s public healthcare work has come through

its two main healthcare-focused subsidiaries Calico and Verily,
Alphabet AI subsidiary DeepMind also has healthcare as one of its
primary fields of interest.
In 2019, DeepMind announced that its machine vision tool for

diagnosing eye disease, during trials at Moorefield’s Eye Hospital
in the UK, was able to correctly diagnose ailments like diabetic
retinopathy as well as trained medical experts.
Alphabet’s advantage over other AI startups and corporates

working on disrupting healthcare is not just rooted in technology —
it is also rooted in scale and resources. For the trials at Moorefield’s
Eye Hospital, a team of trained ophthalmologists and optometrists
had to review more than 14,000 eye scans, with a senior medical
expert on staff to mediate discrepancies.

In July 2019, the DeepMind Health team released a paper about the
performance of a deep learning model developed to help predict the
likelihood of a patient being diagnosed with an acute kidney injury.
In addition to Alphabet’s other work with Sanofi on diabetes and

pharmaceuticals, the two companies are also working on a new AI-
focused partnership as of 2019. The main goal of the partnership
is to use AI to better understand specific “key” diseases, reveal the
best treatment methods for patients, increase the personalization
of healthcare treatment, and “better forecast sales and inform
marketing and supply chain efforts.”
Google continued its expansion into AI-driven healthcare in 2020.

In August, the company partnered with telehealth provider Amwell
to automate patient checkout and waiting room processes across
Amwell’s client network, which spans 2,000 hospitals and 3,600
employers. Google’s AI technologies have also been deployed to
automate language translation services for patients and routine
administrative tasks for physicians. Amwell transitioned from
Amazon Web Services to Google Cloud as part of the arrangement.
August 2020 also saw Alphabet subsidiary Verily establish its

own health insurance services provider, Coefficient Insurance
Co., to develop data-driven solutions that protect employers from
unexpected insurance costs.

LIFE EXTENSION
Calico, which is run by ex-Genentech CEO Arthur Levinson and

focuses mostly on age-related diseases, has been using AI to
analyze health data with the goal of tracking and extending healthy
human lifespans since 2013.
A benefit of operating inside the Alphabet umbrella is that

companies like Calico gain access to more sophisticated
technology, making more effective laboratory techniques possible.
In one experimental example, Calico was able to use machine vision

software to vastly expedite its study of yeast cell aging — important
in understanding what causes yeast cells to degrade over time, and
how that aging process works.
Having access to cutting-edge AI tools built by companies like

DeepMind represents one of Alphabet’s biggest advantages over
competitors like Amazon when it comes to building radical new
solutions to healthcare problems.
Much of Calico’s research remains a mystery, but in recent

years there have been several glimpses into the science behind
Alphabet’s most secretive subsidiary.

Calico began its first major clinical trial for a new cancer drug in
June 2020, conducted in partnership with AbbVie. The company
has also been studying how yeast ages in one of Calico’s few
publicly acknowledged R&D projects, which could help scientists
better understand the aging process at the cellular level.

3. Next-gen computing
ALPHABET IS PRIORITIZING QUANTUM COMPUTING

TECHNOLOGY.
Google was one of the first massively successful tech companies

built entirely on software, but that hasn’t stopped Alphabet from
pursuing hardware interests aligned with its long-term ambitions.
Alphabet’s primary interest in this space revolves around the

unique hardware demands of emerging technologies like artificial
intelligence and quantum computing. Alphabet isn’t interested
in competing with today’s OEMs to own the hardware market —
it’s interested in building the hardware platform for these future
technologies.
The company is looking to put its machine learning and engineering

expertise to work building the next generation of high-performance
computer chips and revolutionizing computing itself with quantum
computing developments.

The main issue Alphabet is looking to address is that efficiently
solving a certain class of problems with machine learning requires
processing power that isn’t available through modern chips.
Since dedicated ML chips don’t need to run traditional software

programs, designing one means starting more or less from a blank
slate — so the playing field is relatively level.
While there are some physical limitations to contend with in

developing chips for AI, Alphabet’s focus on quantum computing
could help overcome them.

AI
When it comes to artificial intelligence, Alphabet is working on

solving a two-pronged problem. AI applications require hardware
with extremely high computation capacity, but they also need to
optimize for efficient energy consumption.
In 2012, the image recognition system AlexNet, used by OpenAI,

performed about one thousand trillion separate calculations every
second. In 2016, Google’s DeepMind built a game-playing neural
net called AlphaZero, which was able to become a grandmaster
at the game Go within hours of simulated training. AlphaZero
consumed about 300,000x the computing power of AlexNet.
Power cycle consumption with deep learning computations has, on

average, doubled every 3.5 months for the last 7 years — and that
trend has shown no signs of slowing.
New chips, on the other hand, are increasing at a pace of only about
3% every year, and even top-of-the-line hardware is inadequate for
the needs of the most complex AI work today.
To address its own AI hardware needs, Google built a custom ASIC

chip that it released in 2016 called the Tensor Processing Unit
(TPU). The chip is specially designed to operate using neural net
workloads, with its parallel computing capabilities today powering
several of Google’s most critical applications: Translate, Assistant,
AlphaGo, and Search.
Google’s Tensor Processing Units naturally integrate with

Google’s widely-used (the fifth most popular open-source project
overall on GitHub) machine learning framework TensorFlow.
Engineers using TensorFlow within their own organizations can
use TPUs to achieve much faster processing times on their own
machine learning projects.

TensorFlow Lite, a new mobile version of TensorFlow, makes
some of that same computing power available to developers
working on mobile and other leaner projects, making it possible
for smartphone-focused developers and others to bring
technologies like rapid image classification and smart reply
options to their applications.

CYBERSECURITY
As the parent organization of one of the world’s largest technology

companies, it should come as no surprise that Alphabet has a vested
interest in cybersecurity technologies. However, while Alphabet
has taken its time when it comes to commercialized cybersecurity
products, this is one area that could see significant investment and
additional product offerings over the next several years.
One of Alphabet’s first major outings into commercial cybersecurity

was Chronicle, a company that emerged from Alphabet’s X
Development (formerly known as Google X) R&D division in 2018.
Chronicle’s first commercial product offering was Backstory, a
system designed to identify potential security risks to enterprise
companies in real time by analyzing security telemetry data with
AI and machine learning algorithms. Chronicle and Backstory were
incorporated into the core Google Cloud service in June 2019.
Source: Medium

Backstory partnered with several leading companies (known as
“Insight Partners”) at launch, including virus threat detection
company Avast and enterprise cybersecurity firm Proofpoint.
Unlike some cybersecurity products, which charge clients

based on the volume of data analyzed, Backstory’s pricing was
determined by an organization’s size. This makes Backstory a
more realistic proposition for smaller companies and offers clients
more stability in terms of billing, given that data volume can
fluctuate substantially.
Backstory’s ability to analyze data from multiple cloud sources,

including AWS and Microsoft Azure, is another strong commercial
advantage Chronicle has over its competition.
Traditional security threats aren’t the only challenges Alphabet is

tackling. The company is also leveraging its technical expertise to
identify larger threats that pose risks not only to global networks
but to society itself, including disinformation, election integrity, and
violent extremism.
Google subsidiary Jigsaw is developing scalable technology

solutions for some of the world’s most challenging disinformation
problems. At present, Jigsaw is closer to a skunkworks project
than a commercial entity, though many of its experiments have
robust commercial potential. For example, Jigsaw’s Assembler
platform aims to help journalists and researchers identify imagery
that may have been manipulated, such as deepfake videos.

QUANTUM COMPUTING
While Google began working on TPUs largely to get around the

diminishing returns of computing power associated with traditional
chips, TPUs are running into issues scaling their processing power
for the most complex deep learning applications.
One of Alphabet’s bets for the long-term future of AI involves

developing an entirely new form of computing: quantum computing.
Google’s work on the research behind quantum computing dates

back more than a decade, but today, Alphabet is focused on using
the technology to break through the computing bottlenecks that are
holding AI research back today.
Quantum computing is another space where Alphabet’s head start

has allowed it to build a competitive advantage. Partnering with
some of the most advanced organizations in the space, including
D-Wave and NASA, Google has now claimed quantum supremacy,
meaning it has reportedly achieved a crucial milestone in quantum
computing ahead of all of its competition.
Google first started working on quantum computing back in 2006.

In 2013, Google became the second firm to purchase a quantum
computer from D-Wave, a Canada-based company that has been a
major player in quantum hardware for decades.
A year later, Google hired a team of quantum computing experts

to start their own lab at Google and focus on quantum computing
research full-time.
This team built Google’s Quantum Artificial Intelligence Lab, which

grew to become a collaboration between Google, NASA, and the
Universities Space Research Association.

In September 2019, Martinis and his team announced the
development of a new microchip called Sycamore. They estimated
the 3 minute and 20 second long sample calculation run using
this quantum chip would take somewhere around 10,000 years if
you had 100,000 conventional computers. The next month, Google
announced it had achieved “quantum supremacy” — using a
quantum computer to successfully calculate a problem that was
beyond the capabilities of a conventional computer.
Not everyone was impressed with Google’s achievement, however.

IBM claimed Google had significantly overestimated the difficulty
of the task, saying that the computation would take a classical
computer system just 2.5 days to complete.
Since then, even more promising developments have emerged

from Google’s quantum computing team. In March 2021, Google
confirmed its intentions to release a series of APIs known as
Floq that will allow developers to use TPUs to create quantum
computing models and run experiments remotely. These simulators
are up to 100x faster than state-of-the-art solutions currently
available. They rely on Cirq, Google’s open-source Python
framework for programming quantum computers.
Floq may not be the first quantum simulator on the market —

Amazon, Intel, and Microsoft are all working on similar initiatives
— but the sophistication of Google’s technology could push the
boundaries of computational research farther than some scientists
ever thought possible.
The main area where Google’s work in quantum computing

promises to be useful is artificial intelligence, where its
technology promises to help address the need for increasingly
high computation capacity. It will take time before Google is
using quantum computing to better screen for disease or make
advancements in materials science, but the advancements the
company has made so far suggest this kind of breakthrough could
occur in the future.

4. Transportation
MACHINE LEARNING AND AI ARE FUELING WAYMO’S

DOMINANCE IN SELF-DRIVING TECH, THOUGH
COMMERCIALIZATION IS LIKELY STILL FAR OFF.
Today, more than 40 automakers and tech heavyweights are

working on building autonomous car technology. Progress towards
working prototypes on the road has been slow, due to disasters like
the fatal crash involving a self-driving Uber vehicle in 2018 and the
collision of a Tesla vehicle that killed two men in 2021, as well as
the inherent technical difficulty of building a self-driving car that
can navigate complex environments safely.
Alphabet’s Waymo has advanced ahead of autonomous driving

projects at Apple, Amazon, and Microsoft by a significant margin,
and is broadly considered to be the industry leader in autonomous
driving technology.
Alphabet has leveraged its expertise in machine learning and

AI hardware, as well as its massive scale and war chest, to fuel
Waymo’s progress.

The company’s cars have logged the most miles, both in the
physical world and in simulations, and Waymo is currently
operating the world’s only operational self-driving ride-hailing
business. Known as Waymo One, the service boasts a fleet of
around 600 autonomous vehicles and currently serves customers
in the Phoenix, AZ metro area. Users can request rides via the
Waymo app in much the same way as other rideshare apps, and
passengers are notified that their vehicle will be fully autonomous
when they request it.
Waymo One launched officially in October 2020, and the service is

expected to be rolled out to other areas in the near future.
Source: Waymo
Waymo’s dominance on the technological front, however, has been

undercut by the company’s more recent sluggish progress and
failure to meet self-imposed deadlines on the commercialization
of that technology. The company’s former chief executive, John
Krafcik, acknowledged the difficulties of applying Waymo’s
technology to the commercial market in 2020. Krafcik ultimately
left Waymo in April 2021 after almost 6 years at the company but
stated he would continue to serve in an advisory capacity.

Alphabet, however, in addition to building a ride-hailing business
around Waymo, is also looking into applying the technology to the
freight industry. The company is also expanding into other parts of
the mobility space, including mapping, and through an investment
in Lime’s electric scooter business, micromobility.
Waymo first showed off its self-driving hardware in February

2017, and began public demonstrations of its software installed in
Chrysler Pacifica minivans a few months later. Not long afterward,
Waymo partnered with ride-hailing company Lyft.
In October 2018, the company announced that Waymo cars had

surpassed 10M real-life miles driven on the road. In the summer
of 2019, the company announced that Waymo had surpassed 10B
simulated miles — a critical component of the way Waymo cars are
trained to understand obstacles and navigate the world correctly.
By January 2020, Waymo had exceeded 20M road miles and 15B
simulated miles, giving its engineers and data scientists vast
volumes of data with which to improve the company’s underlying
technologies.
Alphabet has also been testing Waymo’s capabilities in California

since 2018, when it became the first autonomous vehicle
company to be granted permission to test self-driving vehicles
on California’s roads. Testing was hampered by the Covid-19
pandemic. Waymo’s vehicles traveled approximately just under 2M
road miles in California in 2020 — down 800,000 miles from 2019.

Waymo is unique among the technology companies and
corporates working on autonomous driving technology mainly due
to this public-facing orientation: its goal is not to produce its own
autonomous vehicles, but to partner with an existing automaker or
automakers to sell a safer, more efficient, and potentially cheaper
ride-hailing service to the general public.
The potential prize here is massive. Despite the difficulties

involved in building and bringing autonomous vehicles to the road,
Goldman Sachs estimates that the popularization of autonomous
car technology will take the ride-hailing industry from $5B to
$235B by the year 2030.

However, a truly autonomous car experience for all is still on the
distant horizon for Waymo. California still requires the company
to place a safety driver in the driver’s seat when testing Waymo
vehicles. No driver is now necessary for tests in Arizona, but as
Waymo itself has acknowledged, Arizona represents many of the
ideal testing conditions for the company’s autonomous vehicles
which are unlikely to be found elsewhere around the world.
Reports from early trials of the technology have not been uniformly
positive, with complaints emerging about how Waymo cars dealt
with certain kinds of complex road situations, leading ultimately
to Waymo electing to put safety drivers back into vehicles that
had gone driverless. Waymo vehicles have also been involved in
“dozens” of crashes according to the company’s own reporting,
though no significant injuries have been reported.
Despite these issues, Waymo’s cars have the lowest instances

of disengagement — when the algorithm running the car gives
control back to the human monitor — per miles driven among all
the different autonomous vehicle companies testing in California.
In 2018, Waymo’s human safety drivers in California trials were
only required to take back control of a vehicle once in every 11,000
miles. As far as accidents, Waymo was also superior, with just
three collisions over more than 350,000 miles driven (GM had 22
over 132,000 miles).
But while the company’s progress has eclipsed that of its main
competitors in the autonomous driving space, its own stated
timelines have proven impossible to meet. In 2012, Google co-
founder Sergey Brin predicted consumers would be riding in self-
driving vehicles within 5 years.
Autonomous driving, however, isn’t the only mobility solution that

Alphabet has placed bets on. Both GV and Alphabet took part in
scooter-sharing unicorn Lime’s $335M Series C round in July
2018, broadly anticipating a world where cars are less important
as a form of personal transportation.

GV also participated in Lime’s $170M funding round in May 2020.
The deal that valued the micromobility startup at $510M — a
decline of almost 80% from its previous valuation.
In August 2019, Alphabet announced a new integration with Lime

that would enable users of Google Maps to see nearby available
Lime scooters in more than 100 cities where the on-demand
scooters are available. For more than 50% of all smartphone users
in the US, Google Maps is the default navigation tool.
Alphabet’s integration with Lime is a useful example of how that

popularity could give Alphabet a viable means towards owning
the entire distribution layer of the mobility space. Google already
dominates navigation in general. Today, Google Maps helps
identify locations, give turn-by-turn directions, and give context to
different destinations (like restaurant reviews and open hours).
If Maps can extend to actually helping move people from A to B,

Alphabet can be the mediator between users, ride-hailing, and
other mobility services.

5. Energy
ALPHABET SUBSIDIARIES ARE LOOKING TO RENEWABLES

TO MAKE THE CONGLOMERATE MORE ENERGY EFFICIENT
AND EXTEND SOLUTIONS TO THE PUBLIC.
Alphabet is currently working on solving its intractable energy

consumption challenges — largely driven by Google’s data centers
— and then taking what it learns to offer household solutions that
could disrupt the renewable energy industry in multiple ways.
Alphabet includes a few energy-focused companies under its

umbrella, including Dandelion which offers geothermal energy
services. For a while, Alphabet was also developing a new type of
kite-based wind energy under its subsidiary Makani, but it pulled
support for the business in February 2020.
In December 2020, Sidewalk Infrastructure Partners (SIP) — a

company that emerged from Alphabet’s Sidewalk Labs —
announced Resi-Station, “the largest virtual power plant in
North America.” The plant is powered by SIP’s Resilia power
grid efficiency platform. Developed in partnership with energy
management analytics startup OhmConnect, Resi-Station
promises states and municipalities a power management solution
that can distribute electrical loads more effectively and predict
surges in demand from regional power grids.
Elsewhere, DeepMind is applying machine learning to energy

management, looking for ways to use AI to bring energy usage
and costs down.

Alphabet’s preoccupation with energy stems partly from its own
energy consumption. Google said that its worldwide operations
consumed a total of 5.7 terawatt hours of electricity in 2015:
about as much as all of San Francisco county in the same year,
according to the California Energy Commission. By 2018, Google’s
energy consumption had nearly doubled to more than 10 terawatt
hours, according to Statista.
However, despite its considerable power consumption, Google

has reportedly been fully carbon neutral since 2007. In its 2020
Environmental Report, Google claimed it had also completely
offset its legacy carbon footprint and had issued $5.75B in
sustainability bonds, the largest such issuance by any commercial
entity in history.
Source: Bloomberg New Energy Finance
For years, Google has also been one of the biggest consumers
of renewable energy in the world. In 2016, no company in
North America purchased more renewable energy, according to
Bloomberg New Energy Finance.

Finding cheaper, more efficient sources of renewable energy
represents one of the best ways for Google to lock in energy prices
for the foreseeable future and protect its business from shocks, like
rises in the price of oil. That’s why the company is also focused on
building out its own intelligent, renewable energy infrastructure.
Using machine learning, Alphabet can consume electricity more

efficiently. In 2016, the DeepMind team announced they had
reduced the electricity bill for cooling Google’s data centers by
40%. Today, the program it built to monitor energy usage and make
recommendations — which humans at Google were ultimately
responsible for implementing — runs autonomously, with data
center operators only supervising the recommendations that the
AI-driven system implements.
Alphabet has also invested in offering energy from renewable

sources like geothermal and wind. With companies like Dandelion
Energy, Alphabet is bringing some of that research to the public.
Dandelion Energy, for example, promises homeowners a cheaper

home energy solution through the use of geothermal energy. In
February 2021, Dandelion confirmed it had raised an additional
$30M as part of its Series B round led by Bill Gates’ Breakthrough
Energy Ventures, giving the company a valuation of $65M.
Source: Dandelion

Geothermal energy, which extracts heat from the ground, can
be both cheaper and cleaner than oil and gas. Additionally,
Dandelion’s system can cost about half as much as traditional
geothermal installations (which can cost up to $40,000) — driven
partly by using more standardized units and a less expensive
drilling technique for laying the associated infrastructure in the
ground. Dandelion says its technology has reduced geothermal
energy system installation costs by 60%, and that its remote
monitoring systems have helped eliminate approximately 100,000
tons of carbon emissions.

6. Smart cities
SIDEWALK LABS AIMS TO ACHIEVE DOMINANCE IN THE

SPACE BY OFFERING A COMPREHENSIVE SMART CITY
PACKAGE.
Alphabet’s smart city startup, Sidewalk Labs, began in 2015 with

the mandate to come up with new kinds of technologies to improve
urban life. In the 6 years since, Sidewalk Labs has become a kind
of one-stop shop vendor for smart city technology.
Sidewalk Labs is positioning itself to be the dominant smart city

vendor in two big ways: by leveraging Alphabet’s resources to
make it financially feasible for towns and cities to work with the
company, and by using other Alphabet companies to make its
smart city offering more comprehensive.

Other Alphabet companies contributing to Sidewalk Labs’ work
include Waymo (autonomous cars) and DeepMind (machine
learning), as well as smaller internal startups and spin-offs
including Cityblock (personalized health), Coord (mobility),
Intersection (Wi-Fi), and Replica (urban planning).
While various startups offer some of these services, Sidewalk Labs

can offer cities the full range. In June 2019, the company released
a plan showing how it would put those services to work on its first
full-scale project along a 12-acre stretch of abandoned industrial
space on Toronto’s Lake Ontario shoreline, a project with an
estimated investment cost of more than $1.3B.
Sidewalk Labs planned to invest in a series of new mixed-use

buildings, a renewable energy grid, and underground delivery
tunnels, along with an extension to help bring the area onto the
city’s light rail infrastructure.

A planned renewable grid would use energy recycled from
buildings, sewers, lakes, and the earth to provide heating
and cooling to the rest of the neighborhood. The Quayside
development would feature public Wi-Fi, as well as a variety of
sensors collecting information about traffic patterns in the area,
energy consumption, and building activity.
In May 2020, Sidewalk Labs’ CEO Daniel Doctoroff published a blog

post confirming that the company would no longer be pursuing
the Toronto Quayside project due to “economic uncertainty” and
volatility in the Toronto real estate market that had rendered the
project financially infeasible.
The project had also faced opposition from local residents and
other groups concerned by the scope of Sidewalk Labs’ intentions.
The Toronto Star published leaked documents in 2019 that
revealed Sidewalk Labs’ plans to pursue ownership of a total
of approximately 350 acres, including the original waterfront
site. Despite the failure of the Quayside project, the city still has
ambitious plans to revitalize the waterfront area.
Toronto is not the only city where the company has struggled to
realize its visions of the cities of the future.
A screenshot of Replica’s data analytics platform. Source: Tech Crunch

In 2019, Sidewalk Labs subsidiary Replica, an AI-driven urban
data analytics platform, partnered with the city of Portland, OR,
to develop a large-scale data-gathering initiative to monitor how
pedestrians and vehicle traffic moved through the city. Rather than
relying on sensors, the project used anonymized mobile location
data to evaluate traffic congestion, pedestrian safety, and other
urban planning challenges. However, it was terminated in February
2021 after ongoing disagreements between city officials and
Replica executives about data transparency.
Although several urban development projects have stalled for

Sidewalk Labs, smart city technology still has strong commercial
potential for Alphabet. Replica assisted New York’s Metropolitan
Transportation Authority (MTA) with its employee scheduling
operations to mitigate the impact of Covid-19 on the city’s public
transit systems and has plans to release additional products
throughout 2021 and beyond. The company raised $41M as part
of its Series B round led by Founders Fund in April 2021.

7. Travel
GOOGLE IS LEVERAGING ITS SEARCH CAPABILITIES IN AN

ATTEMPT TO DISRUPT ONLINE TRAVEL AGENCIES.
Some of the most disruptive technology companies of the early

2000s were the online travel agencies (OTAs). Companies like
Expedia and Priceline allowed people to bypass traditional travel
agents, searching for and booking their own flights, hotels, cruises
and rental cars more conveniently and more cheaply than before.
The supremacy of OTAs is largely built on the ability to search for

your own travel accommodations; today, that’s being challenged
by the company that pioneered internet search.
Alphabet is angling to disrupt OTAs by building a better search

experience, asserting its dominance of the search space in general,
and getting its results in front of consumers before companies like
Expedia and Priceline (now Bookings Holdings) can.
In 2011, Google completed its acquisition of ITA, the developer

of the Matrix search engine and used the acquisition to power its
Google Flight Search. The Matrix search engine, built by scientists
at MIT in the 1990s, was the first commercial software that allowed
travel agencies and others to find and compare low airline fares for
a given origin and destination.
Over the years, Google’s flight search competed with traditional

OTAs’ search engines with various new features, including the
ability to automatically identify a consumer’s home airport and
customizable search options like looking for flights within a certain
duration range.

More recently, Google launched a feature that aims to better
integrate browsing for flights and hotels. By saving your
destination and date information from your flight search, Google
can autofill that information into your hotel search, saving time
and creating a more personalized experience for the user.
Source: Google
Google doesn’t yet sell its own flights and hotels — it aggregates
listings from all the major OTAs and presents them on its search
engine results pages and on its Google Travel tool pages.
The major OTAs spend significant sums every year marketing and
running search ads through Google, which means that Google
must toe a cautious line to avoid upsetting its partners.
But through its dominance in search, Google has a powerful

vantage point from which to attack the highly valuable online travel
bookings market — with its data superiority, it is aiming to deliver
a product that is more personalized and relevant than that of the
major online travel agencies (OTAs).

Google can use its massive amount of contextual data and
infrastructure to deliver more personalized search results to potential
travelers, but also to deliver lower and more predictable prices.
In 2019, in what may have been Google’s most aggressive move

against the OTAs yet, the company launched a program that offered
certain locked-in prices on holiday travel to Google Flights users.
Using historical data on what specific flight routes cost, Google

offered consumers the ability to get a refund if the prices on the
pre-booked flights decreased after they booked them.
This move was also an indication of another big advantage

that Google might have in the travel market: the ability to more
accurately predict demand. Being able to project which airline routes
and what destinations will be busy, and to what degree, could be a
hugely valuable service for Google to offer to hotels, airlines, rental
car services, cruise lines, and the rest of the travel industry.
In 2019, Google launched another feature that could divert

consumers from OTAs like Expedia and Booking: smart hotel search.
Users can input their travel dates and see a list of all the available
hotels that have capacity for that period, including highlighted
“great deals” (rooms that are normally more expensive for that
historical date). Each hotel’s page shows the different classes of
room available, reviews sourced from Google users, other things to
do in the area, and booking options.
Lastly, when booking a hotel room, the transaction takes place on

Google itself, rather than forcing customers out to other booking
sites to check out.
Google’s search platform also gives it an opportunity to push its

airline and hotel results in front of users even sooner in the funnel.
Currently, when it detects a query regarding a specific flight route,
Google places a personalized Flights search box inside the search
results page.

Google could one day sell flights, hotels, and other kinds of trips
and accommodations to the millions of people who use Google
every day right through its search results — and there’s evidence to
suggest that many consumers would be on board.
Around 60% of U.S. travelers use OTAs to plan trips, according to a

2018 MMGY study on travel habits. Recent data from Expedia also
suggests that travelers are 57% more likely to book trips via OTAs
than they were prior to the Covid-19 pandemic. Travelers relying
on OTAs also tend to spend more money during their trips and
stay at their destinations longer. However, the study also found
that Google ranked No.2 next to Expedia for “one-stop shops” that
prospective travelers consider online. Google also ranked as the
most popular method overall for researching flights and prices
before traveling.

8. Gaming
ALPHABET WANTS TO CHANGE THE WAY PEOPLE GAME

WITH STADIA, BUT THE PLATFORM HASN’T LIVED UP TO
ITS HYPE THUS FAR.
From bets on VR and streaming to building its own video game

console, few tech companies are as intent on bending the future of
entertainment towards its own vision as Alphabet.
With Stadia, the company is planning one of its biggest

entertainment projects yet: leveraging Google’s infrastructural might
and its acquisition of YouTube to reinvent the way people game.
Alphabet has been seriously investing in gaming for a while. In

2015, it launched YouTube Gaming, a version of YouTube (and
a Twitch competitor) specifically catered to video game content
creators and their viewers.
YouTube currently has hundreds of thousands quarterly active

gaming streamers. Over the 12 months leading up to September
2018, more than 50B hours of content in total were filmed. Those
numbers make YouTube the second-most popular game streaming
service behind Twitch.

Alphabet has invested in or acquired a host of gaming companies,
including:
• Owlchemy Labs
• Agawi
• Niantic
• Green Throttle Games
• Beyond Games
• Bionic Panda
Of the FAMGA companies (Facebook, Amazon, Microsoft,

Google, and Apple), only Microsoft has invested in or acquired a
comparable number of gaming startups, with Amazon, Facebook,
and Apple investing in far fewer.
With its newest and biggest gaming project, Stadia, Google aims
to leverage its scale, machine learning expertise, and technological
infrastructure to build a new kind of console-less gaming experience.
A 2015 patent filed by Google sketching out the basic idea behind Stadia.
Source: US Patent and Trademark Office

Users pay for a subscription to Stadia’s online gaming platform
and can play using a special Stadia controller that can link up with
devices like smartphones or computers. Stadia’s model doesn’t
require customers to buy a dedicated games console or physical
games for their home.
Perhaps most importantly, all of Stadia’s processing takes place

on Google’s cloud infrastructure — meaning, in theory, that
powerful remotely-situated computers can beam high-quality
graphics and CPU-intensive gaming experiences to users in their
homes. However, cloud-based gaming has historically suffered
from issues with delays in responding to gamers’ actions. Stadia
aims to leverage Google’s extensive infrastructure to eliminate
detectable latency and make cloud-based gaming as seamless
as gaming at home. Google is also planning a free version of its
Stadia platform, which it hopes will attract a wider audience.
Google also signed exclusivity agreements with 5 major

development studios, including Harmonix and Supermassive
Games, to produce original titles for Stadia in July 2020. However,
despite well-publicized plans to pursue first-party game
development for the platform, Google backtracked in February
2021 when it announced the closure of Stadia’s development
studios in Los Angeles and Montreal.
One of Stadia’s features that could be compelling for many in the

gaming community is the touted ability to play live with popular video
game streamers. This type of feature could help drive growth for
Stadia as the game streaming and e-sports spaces continue to grow.
However, Stadia’s efforts thus far have generally not lived up

to the hype. Although it was seen as technically impressive at
launch, supporting streaming at 4K resolution at 60 frames-per-
second, Stadia has suffered from repeated missteps and enduring
technical problems.

The platform has experienced consistent issues with pre-ordering,
lags in gameplay, and lackluster reviews for its games library. To
address criticisms about its limited library, Stadia announced plans
to add 100 mainstream titles for the platform in 2021, including
major franchise titles such as FIFA 21.
Stadia’s initial launch also lacked a strong, consistent marketing

message, which resulted in confusion about the nature of the
service. Early reports inaccurately described Stadia as “Netflix
for games,” and the service has also been erroneously touted as
a direct competitor to handheld gaming devices, including the
Nintendo Switch.
Source: Stadia
The service has also experienced an exodus of senior executives

and experienced developers. Google’s decision to close Stadia’s
development studios in Los Angeles and Montreal prompted
industry veteran Jade Raymond to leave the company and
establish her own Sony-backed development studio, Haven
Studios, in March 2021.

Stadia’s former product lead John Justice — who previously
criticized Stadia’s overpromising and underdelivering —
announced his own departure in May. Six developers left Stadia to
join Raymond at Haven shortly after Justice’s departure, including
General Manager Sebastian Puel, Head of Creative Services &
Publishing Corey May, and Staff UX Researcher Jonathan Dankoff.
Whether Stadia succeeds in changing the business model behind

gaming will ultimately rely on whether it can deliver on its game-
changing features before the platform expires from lack of
interest. Stadia remains a technically impressive proof of concept,
but unless Google can offer coherent messaging and a reason
for consumers to move away from more fully featured product
offerings like XBox’s Game Pass, it may be some time before
Stadia’s true value becomes apparent.

9. Media
YOUTUBE TV IS BATTLING WITH AMAZON PRIME AND

HULU TO WIN OVER CORD-CUTTERS.
Since Google acquired YouTube in 2006, the streaming site has

become the most popular destination for online video. Around 5B
videos are reportedly watched on the platform every day.
With its live TV and DVR service YouTube TV, Alphabet is trying to
leverage YouTube’s dominance in general streaming media and the
power of its brand to compete with traditional broadcast TV.
YouTube TV offers live TV from 85+ channels for $64.99 a month.

The average cost of an extended cable TV service is over $70 per
month, according to the FCC. YouTube TV’s model also offers
unlimited DVR with no fees, as well as not requiring a fee for renting
a box or for canceling.
Another key part of YouTube TV’s value proposition is the

platform’s ability to use past viewing data to offer personalized
recommendations about what to watch next.
For advertisers, YouTube TV could potentially offer a place to reach

consumers in a more targeted way than traditional broadcast
television. For example, the personalization data that YouTube
collects could be used to give advertisers a more complex
audience model and help them better target their ads.
One big problem YouTube has faced is concern over its reluctance
to censor allegedly damaging or harmful content uploaded to
the website. Alphabet’s Jigsaw, an internal unit working on
identifying emerging societal threats on the internet, is trying to
solve that problem.

One output of the company’s efforts is the Perspective API, which
was developed by Jigsaw and Google’s Counter Abuse Technology
team. The software uses machine learning to identify instances of
abuse online, gives those instances a “score” depending on their
severity, and makes that information accessible to human content
moderators to help them make a decision about what action to take.
Since being made available in 2017, organizations like The New

York Times, Wikipedia, and Reddit have tested Jigsaw’s ability to
combat toxic comments sections.
Despite these issues, YouTube does have one big advantage over
other television streaming services like Amazon Prime Video and
Hulu: it has better penetration into regular consumers’ everyday lives.
Over 20% of video streaming during Q2 2020 took place on

YouTube, making YouTube second only to Netflix (34%) according
to Nielsen data. The report found YouTube to be far ahead of other
streaming rivals like Hulu (11%) and Amazon (8%).
As the competition heats up between the major streaming

services and emerging rival options from companies like Comcast,
YouTube’s ability to stay top-of-mind could be vital as the
company looks to expand its media ambitions.

10. Banking
GOOGLE IS WORKING TO BECOME THE GATEKEEPER

BETWEEN ITS USERS AND BANK SERVICES.
Despite Google’s recent announcement that it would be launching

checking accounts in 2020, its goal in banking appears to be
less about becoming a bank and more about acting as the
mediator between its millions of users and the services offered
by traditional banks.
By becoming the conduit through which banks can offer services,

Google stands ready to collect a vast amount of valuable data on
what services are useful and why. It could then use that data to
aggregate demand, similar to the way it approaches hotels and
travel searching.
Google’s biggest fintech product so far has been Google Pay

— formerly Android Pay — which merged with Google Wallet in
January 2018. Google Pay was active in 28 countries by the end of
2018, and processed 1B transactions in its first year. Google Pay is
now available in 40 countries. In India, the product had over 75M
users as of June 2020.
India has been a particularly rich region for Google’s fintech

ambitions, with the company launching the mobile payments
platform Tez (later rebranded under Google Pay) in the country in
September 2017.
In 2020, the company made its biggest foray into banking to date
when it announced a long-awaited expansion of Google Pay into
adjacent financial services. In November, Google revealed plans to
partner with 11 banks and financial services providers, including
Citi and Stanford Federal Credit Union, to offer “Plex” checking and
savings accounts.

Google’s Plex accounts will not feature minimum-balance
eligibility criteria, and users will not be charged monthly fees
to maintain Plex accounts. Account holders can also apply for
a physical debit card, which will be administered and serviced
by MasterCard.
Google’s ambitions for the financial sector aren’t limited to offering

checking and savings accounts. The company also intends to
go after instant payment services like Square’s Cash service and
Venmo by expanding the functionality of Google Pay’s mobile
apps. Users will be able to send and receive funds via Google Pay.
The app will integrate more closely with other apps in the Google
ecosystem, such as Gmail, enabling users to search their email for
receipts and purchase confirmations.
Google is working with Citi to launch checking accounts.
Cit Plex accounts will be run by Citi and branded with the
bank’s imagery. In keeping with Google’s desire to mediate the
relationship with the end-user, users will ultimately access their
accounts using Google Pay.

Offering checking accounts could be a way for Google to help
its Pay service compete with mobile payment services from
companies like Samsung and Apple, which have seen higher usage
so far. It could also help Google collect valuable data on payment
patterns and other types of consumer financial information,
possibly helping it market its advertising services.
The move is not surprising from Citi’s point of view either,

considering the partnerships that it has formed with companies
like Paytm (India) and Grab (Southeast Asia).
For Citi, Google presents an opportunity to increase customer

acquisition by working with one of the main platforms that
consumers use to access the internet.

11. Satellite imaging
ALPHABET IS MOVING BEYOND MAPS TO OFFER

SUPERIOR IMAGING OF EVERY INCH OF THE PLANET’S
SURFACE.
It’s been 20 years since Google first launched Google Earth.

Satellite imaging and geographic information system (GIS)
technologies have come a long way during the past 2 decades, and
today, Alphabet is applying its vast resources to provide clearer
images of our world from space.
Alphabet has made significant investments in satellite imaging

startups in recent years via its GV investment arm. These
investments represent major growth opportunities for Alphabet,
particularly as the commercial space travel market matures and
barriers to entry become lower.
GV acquired a stake in Orbital Insight in 2016. Founded by former

Google Books director James Crawford in 2013, Orbital Insight
provides imaging services to private entities and governments. Its
technology has been used to identify patterns in everything from
the health of corn crops to how busy the back-to-school shopping
season is likely to be based on vehicle movements in store parking
lots. GV currently owns approximately 13% of the company and
has participated in all of Orbital Insight’s funding rounds.
Shortly after investing in Orbital Insight, GV acquired a 16%

ownership stake in imaging startup Planet in 2017. The company
was founded by a team of former engineers at NASA. Planet
currently has around 150 imaging satellites orbiting the Earth, the
single largest constellation of satellites owned by a single entity.
Planet is valued at approximately $2.2B.

Alphabet’s various ventures in satellite imaging have significant
commercial potential in a wide range of fields, from agriculture to
national security. But Alphabet is interested in much more than
just selling the data gathered by orbital satellites — it wants to
change how satellites are launched into space, too.
In 2020, GV was one of several institutional investors that funded

a startup known as SpinLaunch, a “kinetic energy-based launch
system” founded by Jonathan Yaney in 2014. SpinLaunch’s
proprietary technology is a type of mass accelerator that promises
to revolutionize the fledgling commercial space-flight industry by
replacing costly rocket-based satellite deployments with a unique
kinetic launch system.
Source: Popular Mechanics
SpinLaunch uses gravity to accelerate rockets to speeds of up to

5,000 miles per hour in a special centrifuge — which is roughly the
size of a football field — before propelling them beyond Earth’s
atmosphere using secondary chemical thrusters.

Yaney claims SpinLaunch’s terrestrial launch system will allow the
company to offer commercial space deployments at significantly
lower costs, multiple times per day — a feat currently impossible
due to the enormous amounts of fuel necessary to propel rockets
beyond the gravitational pull of Earth’s atmosphere.
Although SpinLaunch’s technology may seem farfetched, that has

not deterred the federal government from investing. SpinLaunch
secured a $2.5M contract awarded by the Defense Innovation Unit
at the US Department of Defense in 2019. The company plans to
conduct its first commercial launch by 2022.

12. Defense
ALPHABET’S SOPHISTICATED AI TECHNOLOGIES ARE

POWERFULLY ATTRACTIVE TO GOVERNMENTS AND
DEFENSE AGENCIES WORLDWIDE.
As one of the world’s largest technology companies, it’s hardly

surprising that Google’s work has been of great interest to the
national security and defense communities. Although they
have been contentious, projects for the Department of Defense
and other government agencies around the world have vast
commercial potential for Alphabet.
One of Google’s first major moves in the defense space came

in 2018 when its AI technology was reportedly used by the
Department of Defense to improve the accuracy of unmanned
aerial vehicle (UAV) strikes. Specifically, Google’s machine vision
technology was used to help analysts make sense of imaging data
gathered by the US military’s fleet of more than 1,100 drones. The
initiative was part of the Algorithmic Warfare Cross-Functional
Team, better known as Project Maven.
Source: The Intercept

More than 3,100 Google employees signed a letter to Google’s
leadership team in April 2018, decrying their work being used to
advance what the letter described as “the business of war.” The
following month, almost a dozen employees quit in protest. More
than 400 scientists, researchers, and academics wrote their own
open letter of support for the employees, criticizing Google’s work
for the Department of Defense.
In a statement issued in response, Google insisted its work on

Project Maven was “specifically scoped to be for non-offensive
purposes,” despite the fact that its technology was used in
weapons systems for use in counterterrorism operations, including
offensive operations against ISIS.
Project Maven was a PR black eye for Google, but it also had
significant material consequences for the company. As a result of
the outcry over its involvement in Project Maven, Google decided
against bidding on a $10B Pentagon contract in October 2018
as part of the Joint Enterprise Defense Initiative, or JEDI. Google
reportedly hoped the deal would have raised its stature in the
governmental arena and closed the gap between it and Amazon
and Microsoft, both of which provide technology to the Department
of Defense. Ultimately, Microsoft secured the contract.
Despite criticism from academics, the public, and Google

employees, defense contracts represent significant revenue and
growth opportunities for Alphabet and its subsidiaries. Alphabet’s
investments in geospatial data analytics, AI, machine learning, and
related technologies all have strong potential military applications.
Google has also successfully bid on Department of Defense
contracts since the controversy with Project Maven, deals that may
lead to additional business in the future.

While public perceptions and employee dissent have influenced
Google’s stance on defense contracts, such as its decision to
implement formal principles concerning how its AI technology
is used, the landscape of defense contracting puts Alphabet
under even greater pressure. In addition to its $10B JEDI
contract, Microsoft is supplying the US military with its HoloLens
augmented-reality headsets, and GitHub has provided software
solutions to Immigration and Customs Enforcement (ICE). Amazon
has provided cloud services to the CIA and facial-recognition
technology to ICE, contracts that could be worth billions in
potential revenue.
With large, highly lucrative contracts being snapped up by Google’s

closest competitors, the real question for Alphabet is how it can
successfully bid on defense contracts while maintaining a positive
image among the public and its employees.

What’s next for Alphabet
Google’s search and advertising businesses have laid the

foundation for Alphabet to pursue a broad range of projects,
experiment with moonshots, and strategize how it might disrupt
staid industries like healthcare, banking, and transportation.
However, this report is by no means representative of everything

going on inside Alphabet today. The company has plenty of other
projects at various stages that could one day prove disruptive.
One of the most promising avenues of future disruption for

Alphabet may be retail. The company partnered with a collection
of major retailers in 2017, allowing consumers to use a Google
Express front-end to shop from stores like Costco, Walmart, and
Target.
Shopping Actions, which launched in 2018, bridged the gap

between the mobile, desktop, and voice versions of the company’s
shopping platform, which the company says led to as much as
30% higher cart totals in early tests.
Today, Google’s shopping service still can’t beat Amazon on

logistics. But the success of one of Alphabet’s other in-progress
experiments — the autonomous delivery drone service Wing —
could one day be the last-mile solution that connects Google’s
online storefront directly to customers and reconfigures the entire
retail landscape in the process.

Additional reading
This report was created with data from CB Insights’ emerging

technology insights platform, which offers clarity into emerging
tech and new business strategies through tools like:
• Earnings Transcripts Search Engine & Analytics to get an

information edge on competitors’ and incumbents’ strategies
• Patent Analytics to see where innovation is happening next
• Company Mosaic Scores to evaluate startup health, based on

our National Science Foundation-backed algorithm
• Business Relationships to quickly see a company’s

competitors, partners, and more
• Market Sizing Tools to visualize market growth and spot the

next big opportunity
If you aren’t already a client, sign up for a free trial to learn more
about our platform.

CB Insights - Industries Disrupted by Alphabet

Uploaded by

Copyright:

Available Formats

CB Insights - Industries Disrupted by Alphabet

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

CB Insights - Industries Disrupted by Alphabet

Uploaded by

Copyright:

Available Formats

Alphabet’s Next

CB Insights helps the world’s leading companies make

Our Technology Insights Platform provides companies

SIGN UP FOR A FREE TRIAL

11. Satellite imaging 64

What’s next for Alphabet 70

Alphabet’s Next Billion-Dollar Business: 12 Industries To Watch 3

Alphabet is using its dominance in the search and advertising

Alphabet’s Next Billion-Dollar Business: 12 Industries To Watch 4

Elsewhere, Alphabet is using its scale to build a better virtual

Alphabet’s Next Billion-Dollar Business: 12 Industries To Watch 5

ARTIFICIAL INTELLIGENCE COULD BE THE KEY TO

Within the world of consumer electronics, Alphabet has already found

Today, however, Alphabet’s consumer electronics strategy is being

Google hasn’t demonstrated a strong ability to compete with

Though the company has seen several of its products struggle

Android is the foundation of Google’s work in electronics. It has

Alphabet’s Next Billion-Dollar Business: 12 Industries To Watch 6

In 2014, Google launched its plan to expand the Android operating

Google made one of the most significant updates to Wear OS in the

Despite these developments, Wear OS accounted for just 3% of

Alphabet’s Next Billion-Dollar Business: 12 Industries To Watch 7

Google’s expansion of the Android operating system also included

Google revamped Android TV’s interface in February 2021 to

Source: The Verge

Alphabet’s Next Billion-Dollar Business: 12 Industries To Watch 8

In 2017, the tech giant released a selection of new “smart” home

Google’s growing range of smart-home products has seen

Google confirmed its plans for a new range of Nest-branded security

Alphabet’s Next Billion-Dollar Business: 12 Industries To Watch 9

Google has invested heavily in its voice recognition technologies

Now automakers are coming to Google for help building out

• Fiat introduced a special edition of the classic Fiat 500 in

• Volvo’s forthcoming 2022 XC60 also features extensive

• In February 2021, Ford signed a 6-year exclusivity deal that

Alphabet’s Next Billion-Dollar Business: 12 Industries To Watch 10

This approach is Google’s trademark play in consumer electronics:

With Android’s flexibility and reach, it can extend its software to

In this sense, Google’s disruptive potential may have less to

Alphabet’s Next Billion-Dollar Business: 12 Industries To Watch 11

ALPHABET IS FOCUSING ON PARTNERSHIPS AND LEVERAGING

One of the industries that Alphabet is most engaged in today — and

Alphabet is learning from the mistakes it made trying to go it alone

It might seem like a distraction for a company like Alphabet to

Alphabet’s Next Billion-Dollar Business: 12 Industries To Watch 12

Google’s earliest attempt to disrupt healthcare was hamstrung

Google also has a neural network patent that uses AI to help

Today, Alphabet’s focus is on forming valuable partnerships and

For example, Alphabet has run several AI-focused healthcare

Alphabet’s Next Billion-Dollar Business: 12 Industries To Watch 13

Alphabet is working in partnership with existing institutions in

Alphabet’s Next Billion-Dollar Business: 12 Industries To Watch 14

So far, diabetes has been one of the most productive fields of

Verily partnered with Nikon subsidiary Optos to work on better

With this technology, a technician takes a photo of the patient’s

Alphabet’s Next Billion-Dollar Business: 12 Industries To Watch 15

The Onduo for Diabetes app includes access to past glucose

In 2019, Onduo partnered with Orpyx Medical Technologies to make

In August 2020, Onduo published a whitepaper on the benefits