Verily Life Sciences, Alphabet’s healthcare technology unit, is embarking on a major strategic transformation centered around artificial intelligence as it approaches its 10th anniversary in 2025. The company is repositioning itself as a comprehensive AI infrastructure provider for the healthcare industry, moving away from its previous scattered approach to focus on helping other healthcare companies develop AI models and applications.
The new strategy involves offering Verily’s technology infrastructure to health plans, providers, digital health startups, and pharmaceutical companies for AI model training, data storage, and app development. For example, digital health startups could leverage Verily’s tools to build AI-powered coaching apps for weight loss without extensive coding. Large pharmaceutical companies could use the platform for drug discovery and clinical research applications.
Verily is planning to raise another funding round in the coming year, with Alphabet likely leading the investment following its $1 billion contribution in 2022. However, leadership is also exploring outside capital as the company seeks greater independence from its parent company. This financial move comes as Verily attempts to transform long-developing projects into profitable ventures.
Currently, Verily’s primary revenue source remains Granular Insurance, its stop-loss insurance business for employers—a lower-margin operation compared to its AI infrastructure ambitions. The company has faced criticism for lacking strategic focus, having previously pursued diverse projects from mosquito population editing to surgical robots, many of which haven’t materialized.
Under CEO Stephen Gillett, who replaced Andy Conrad in 2023, Verily has streamlined operations by laying off 15% of its workforce and concentrating resources on fewer initiatives. The AI strategy gained momentum with the hiring of Myoung Cha as chief product officer and Bharat Rajagopal as chief revenue officer earlier this year.
The company’s Workbench platform already demonstrates this capability through its partnership with the National Institutes of Health, hosting massive healthcare datasets with analysis tools. Verily plans to roll out its AI infrastructure tools throughout 2025, betting that specialized AI models for healthcare will be increasingly valuable as patient data remains largely private despite general AI models training on internet-wide information.
Simultaneously, Verily is completing its separation from Google’s internal systems through an initiative called Flywheel, with a December 16, 2024 deadline for cutting many ties, resulting in employees losing certain Google benefits.
Key Quotes
Large pharma companies, for example, look at the work we do and recognize that the data science applications or clinical research tools that they need to build themselves could be better if they were built using our platform
Verily CEO Stephen Gillett explained the company’s value proposition in a November interview with Fortune, highlighting how pharmaceutical companies see Verily’s AI platform as superior to building their own tools from scratch.
advance fewer initiatives with greater resources
This statement from CEO Stephen Gillett in 2023 marked a strategic turning point for Verily, signaling the end of its scattered approach and the beginning of its focused AI infrastructure strategy, accompanied by a 15% workforce reduction.
some employees may feel Verily is no longer the place for them after the separation
Gillett acknowledged in a town hall meeting that Verily’s separation from Google’s systems and benefits would create cultural challenges, as employees lose perks associated with being part of Google’s ecosystem.
Our Take
Verily’s transformation illustrates a critical maturation phase for Alphabet’s “other bets” portfolio. After years of experimentation, the company is finally finding a focused identity in healthcare AI infrastructure—a smart pivot given the sector’s desperate need for specialized AI tools and the barriers preventing companies from building them independently. The timing is strategic: as generative AI creates unprecedented demand for specialized models, Verily can leverage its decade of healthcare data experience. However, the company faces significant execution risks. Converting from an insurance-revenue business to a high-margin AI platform provider requires not just technology but also sales capabilities and market validation. The fundraising plans suggest confidence, but also highlight that profitability remains elusive. Verily’s success could validate the B2B AI infrastructure model for regulated industries, potentially inspiring similar pivots across Alphabet’s portfolio and the broader tech industry.
Why This Matters
This strategic pivot represents a significant shift in how AI technology is being commercialized in healthcare, one of the most promising yet challenging sectors for artificial intelligence adoption. Verily’s transformation from a scattered “moonshot” operation to a focused AI infrastructure provider reflects broader industry trends toward specialized, vertical AI solutions rather than general-purpose tools.
The healthcare industry faces unique challenges in AI adoption due to data privacy regulations, fragmented systems, and the need for specialized models trained on medical data. Verily’s positioning as a one-stop-shop for healthcare AI infrastructure could accelerate AI adoption across pharmaceutical research, clinical trials, and patient care applications.
This move also signals Alphabet’s continued commitment to healthcare AI despite the unit’s struggles to achieve profitability. The potential fundraising round and push for independence suggests Alphabet is willing to invest further while allowing Verily operational autonomy. For the broader AI industry, Verily’s success or failure will provide crucial insights into whether platform-based AI infrastructure models can succeed in highly regulated industries, potentially influencing how other sectors approach AI implementation and commercialization.
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Source: https://www.businessinsider.com/verily-fundraise-2025-ai-strategy-google-breakup-2024-12