Google’s UK-based artificial intelligence unit DeepMind lost half a billion pounds last year, a similar figure to 2018, and its parent company Alphabet wrote off a further £1.1bn in debt, according to its latest accounts.
The figures underline the huge investment that Google continues to make in the London-based AI team that it acquired in 2014 for about £400m, with the most talented machine-learning researchers able to command huge salaries.
DeepMind’s revenues, which are derived entirely from applying its technology to commercial Google projects such as making its data centres more energy efficient and improving the voice of its virtual assistant, increased 158 per cent in 2019 to £265.5m in 2019.
But turnover was once again dwarfed by pre-tax losses of £460.9m, down 2 per cent on 2018. Administration expenses — which include staff and infrastructure costs — grew 26 per cent to £717m.
In addition, DeepMind said that its parent company had “waived the repayment” of loans and interest totalling £1.1bn, which had accumulated over recent years.
“During the period covered by these accounts, DeepMind laid the foundations for our groundbreaking results in protein structure prediction — a 50-year grand challenge in biology and collaborated with teams across Google to deliver real-world impact at scale,” a DeepMind spokesperson said.
“Our teams were involved in a huge range of projects, from improving the predictability of wind power to accelerating ecological research in the Serengeti. We’re excited to build on this unprecedented progress as we head into next year.”
DeepMind’s filings make only vague allusions to the controversial transfer of its health division to Google last year. Streams, a London-based team of more than 100 staff, had a five-year partnership with 10 National Health Service hospitals to process 1.6m patients’ medical data, raising privacy concerns when the unit was handed over to Google. DeepMind said at the time that the data used in the Streams project would remain under NHS control after the transfer.
The latest filings published to the UK’s Companies House registry on Thursday refer obliquely to the transfer of “distributed intellectual property assets which had a nil book value” to another Alphabet company, completed on October 31 2019.
Despite the ongoing losses, Google has said it will continue to provide financial support to DeepMind and the group, whose headquarters are in London’s King’s Cross, is not expected to turn a profit anytime soon.
“I’m very happy with the pace at which our R&D on AI is progressing,” Sundar Pichai, chief executive of Alphabet and Google, told investors and analysts on July’s quarterly earnings call. “I’m excited at the pace at which our engineering and R&D teams are working both across Google and DeepMind.”