Alphabet helps DeepMind to turn its first ever profit
Controversial AI firm that only sells to Google companies reports £43.8m in profits for 2020
7 October 2021 | 0
DeepMind, the London-based AI research firm, has turned a profit for the first time ever, reporting in £43.8 million in profits for 2020.
The firm has posted multi-million-pound losses over the last several years and reportedly burned through $649 million in 2019.
Much of DeepMind’s losses came from employment, with the company spending £473 million on staff costs in 2019. The firm employs some of the world’s leading AI researchers, many of whom command annual salaries of £1 million or more. At present, the company employs over 1,000 people.
DeepMind did not provide a specific reason for its revenue jump, but its turnover more than tripled from just £265.5 million in 2019 to £826.2 million in 2020, according to annual results filing on Companies House.
There is a suggestion that the revenue rise is down to some ‘creative accounting’, as the Alphabet-owned company doesn’t directly sell products to consumers. It also hasn’t announced any deals with third parties and primarily deals with other Alphabet-owned entities, such as Google, YouTube and X, which is a company dedicated to ‘moonshot’ projects.
“I don’t think DeepMind has many or any revenue streams,” a CNBC source said. “So all that income is based on how much Alphabet pays for internal services, and that can be entirely arbitrary.”
The firm may be back to reporting losses next year, depending on the outcome of a legal dispute. This week, it was revealed that a UK law firm is suing DeepMind over an alleged breach of data protection laws over a deal with the Royal Free hospital in London.
A five-year partnership between the NHS Trust and DeepMind was announced in 2015 to build a smartphone app called Streams, But The Jurist reported that DeepMind had gained access to more data than originally thought, such as admissions, discharge and transfer, accidents, emergencies, critical care, pathology and radiology data.
© Dennis Publishing
Like what you see?
Ireland’s ONLY dedicated news feed for the distribution and retail channel.
Our editorial mix includes channel news, trend analysis, Deals Done, regular ‘Channel Chat’ interviews and strategic product focuses. This is a vital medium through which the technology channel can network and identify new business opportunities.