Google CEO Sundar Pichai told employees last week that “the stakes are high” for 2025 as the company faces increasing competition and regulatory hurdles and struggles with rapid advances in artificial intelligence.

At a 2025 strategy meeting on Dec. 18, Pichai and other Google executives dressed in ugly Christmas sweaters praised the coming year, particularly in terms of the future of AI, according to audio recordings obtained by CNBC.

“I think 2025 will be crucial,” Pichai said. “I think it’s really important that we internalize the urgency of this moment and need to move faster as companies to solve real user problems.”

Some employees attended the meeting in person at Google headquarters in Mountain View, California, while others joined in virtually.

Pichai’s comments come after a year packed with the most pressure Google has seen since its IPO two decades ago. While areas such as search ads and cloud delivered strong revenue growth, competition in Google’s core markets increased and the company faced internal challenges, including culture clashes and concerns about Pichai’s vision for the future.

In addition, regulation is now stricter than ever.

In August, a federal judge ruled that Google illegally held a monopoly on the search engine market. The Justice Department in November demanded that Google be forced to divest its Chrome Internet browser unit. In another case, the DOJ accused the company of illegally dominating online advertising technology. That process concluded in September and is awaiting a judge’s decision.

That same month, the UK competition regulator issued a statement of objection to Google’s ad tech practices, which the regulator preliminarily found to harm competition in the UK

“It is not lost on me that we face scrutiny around the world,” Pichai said. “That has to do with our size and our success. It’s part of a broader trend where technology is now having a major impact on society. So, at this moment more than ever, we need to make sure we don’t allow ourselves to be distracted.”

A Google spokesman declined to comment.

Google’s search business still has a dominant market share, but generative AI has opened up all sorts of new ways for people to access online information and brought with it a host of new competitors.

ChatGPT from OpenAI triggered the hype cycle at the end of 2022, including among investors Microsoft have since brought the company to a value of $157 billion. In July, OpenAI announced that it would launch its own search engine. Perplexity also touts its AI-powered search service and recently closed a $500 million funding round at a $9 billion valuation.

Google is investing heavily to stay at the top, especially through its Gemini AI model. The Gemini app gives users access to a range of tools, including Google’s chatbot.

Pichai said “building large, new businesses” was a top priority. This also includes the Gemini app, which Google says will be the next app from Google to reach half a billion users. The company currently has 15 apps that reach this mark.

“There is strong momentum on the Gemini app, especially in the last few months,” Pichai said. “But we still have a lot to do in 2025 to close the gap and build a leadership position there too.”

“Scaling Gemini on the consumer side will be our biggest focus next year,” Pichai later added.

At the meeting, Pichai showed a diagram of large language models, with Gemini 1.5 leading OpenAI’s GPT and other competitors.

“I expect some back and forth” in 2025, Pichai said. “I think we’ll be up to speed.”

He acknowledged that Google had to catch up.

“You don’t always have to be first in history, but you have to perform well and really be the best in class as a product,” he said. “I think that’s what 2025 is all about.”

Executives answered questions submitted by employees through Google’s internal system. A comment read by Pichai suggested that ChatGPT is “becoming as synonymous with AI as Google searches,” with the questioner asking, “What is our plan to combat this in the coming year?” Or do we not focus so much on the consumer before LLM?”

For the answer, Pichai turned to DeepMind co-founder Demis Hassabis, who said that teams will be “supercharging” the Gemini app and that the company has seen progress in the number of users since the app launched in February. He said: “The products themselves will evolve massively over the next year or two.”

Hassabis described the vision of a universal assistant that can “work seamlessly across any domain, any modality and any device.”

Project Astra, Google’s experimental version of a universal assistant that the company announced in May, will be updated in the first half of the year.

Another employee question asked whether Google will be able to launch AI products without charging $200 a month “like other companies.”

“Right now we have no plans for this type of subscription tier,” Hassabis responded, adding that he thinks the $20 monthly fee for Gemini Advanced is a good value. “I wouldn’t necessarily say never, but there are no plans for it at the moment.”

Towards the end of the meeting, Google welcomed Josh Woodward, head of Google Labs, to the stage. He took the microphone while the Zombie Nation song “Kernkraft 400” played loudly in the background.

“I’m going to try to do six demos in eight minutes,” said Woodward, who is known for his high energy.

Woodward first introduced Jules, a programming assistant who is on the program of a trusted tester. He said, “This is where the future of software development is going.”

Woodward then moved on to AI note-taking product NotebookLM, which included a number of updates in 2024, including a podcasting tool. Woodward demonstrated how the company is trying out a new feature that allows the user to call in to a podcast.

He then moved to Project Mariner, an AI-powered multitasking Chrome extension. Woodward asked to add the top restaurants from Tripadvisor to the map app. After a short break, the demo worked successfully and elicited applause from the employees present.

Throughout the meeting, Pichai repeatedly reminded employees of the need to “remain combative.” Google has undergone an extensive period of cost-cutting, which included cutting about 6% of its workforce in 2023 and a continued focus on efficiency.

At the end of the third quarter, Alphabet had 181,269 employees, down about 5% from the end of 2022.

At one point, Pichai referenced Google founders Larry Page and Sergey Brin, who founded the company 26 years ago, long before cloud computing or AI tools existed.

“If you look at how the founders built our data centers in the early Google days, they were really, really argumentative about every decision they made,” Pichai said. “Constraints often lead to creativity. Not all problems are always solved by the number of employees.”

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