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Alphabet CEO Sundar Pichai is close to achieving billionaire status, thanks to his generous stock compensation—and he’s only likely to get richer. Alphabet revealed in a securities filing late Friday that it had awarded him several new grants of stock, to vest over the next three years, which could potentially be worth nearly $700 million. We say “potentially” because he’ll only get that much stock if Alphabet shares outperform most of the stock market in the next few years. Still, judging by how Pichai has done in the past with these stock awards, that’s a good bet.
The CEO gets big stock awards every three years, some of which vest over time regardless of what happens, while others are “performance-based,” which means Pichai only collects if Alphabet stock does well. Take an award he got in 2019 that included two such performance-based tranches with a “target value” totaling $90 million. If the stock did very well compared to the rest of the market, he could get twice the target. Pichai ended up receiving almost the maximum amount possible, worth more than $300 million when it vested between 2022 and 2023, although about half went to pay taxes.
In 2022, he got another stock award also dependent on Alphabet’s price with a target value of $126 million. Alphabet stock rose roughly 250% between 2023 and 2025—more than twice the overall market’s rise—so this time he got the maximum. Half of that haul vested a year ago, and Pichai got stock worth around $270 million before taxes. The second half vested last month and he received shares then worth $448 million, although once again taxes took roughly half. Despite the taxes, and Pichai’s occasional share sales, a securities filing last week showed him holding about $900 million worth of Alphabet stock. Billionaire status is not far away.
Oracle in the Spotlight
Oracle takes center stage in tech news this week, reporting its third fiscal quarter on Tuesday, for the period through February. (Why companies can’t agree on a fiscal year is a constant source of puzzlement.) This report will get a lot of attention. Oracle has been one of the more aggressive companies in ramping up spending for the AI boom as it tries to catch up to much bigger firms offering public cloud services. In doing so, it has begun spending more cash than it brings in, forcing it to borrow money and raise new equity. The payback on that spending is just beginning.
Analysts expect Oracle to report a 20% jump in quarterly revenue to $16.9 billion, according to S&P Global Market Intelligence. That would be a notable acceleration from 13% in the first half of its fiscal year. But it’s still a long way short of the 48% growth Wall Street is projecting Oracle will deliver in fiscal 2028, when its AI cloud business is really supposed to take off. (This fiscal year, analysts are projecting its revenue will grow 16.6%, double the rate in fiscal 2025.) For that reason, investors this week will still likely focus on the costs of the expansion, specifically the cash burn. For the first half of the year, Oracle burned through $10 billion, and analysts project the full-year cash burn will hit $23 billion, S&P data show.
Oracle has taken steps to rein in its consumption of cash, announcing a big restructuring last September to cut employee numbers. Bloomberg reported last week that the company is expected to announce the layoffs of thousands of employees this month. Perhaps Oracle will make the AI argument—that using AI tools allows it to get by with fewer people, as Jack Dorsey’s Block said late last month.
But just as critics pointed out that Block was bloated to begin with, Oracle’s workforce looks like it could go on a diet. At the end of the firm’s last fiscal year, Oracle reported 162,000 employees but just $57.4 billion in revenue. Microsoft, in comparison, generates 5 times as much revenue on only 1.4 times as many people. Cutting employee numbers drastically would certainly help Oracle deal with its massive AI spending.
In Other News
• Microsoft, Amazon and Google will keep selling Anthropic models—and other products powered by its models—to most customers after the Pentagon said it was designating Anthropic a supply chain risk, the companies said.
• SoftBank Group is working with four banks including JPMorgan Chase on a $40 billion loan to help fund its new investment in OpenAI, according to a person with knowledge of the discussions.
• OpenAI’s robotics chief said Saturday that she was leaving OpenAI over its negotiations with the Department of Defense. “Surveillance of Americans without judicial oversight and lethal autonomy without human authorization are lines that deserved more deliberation than they got,” Caitlin Kalinowski wrote in a X post.
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