Google's former CEO says the tech giant is losing out to OpenAI and Anthropic because staff are working from home

• OpenAI and Anthropic have been giving Google a run for its money in the AI race.
• Ex-Google CEO Eric Schmidt says the company's work-from-home policy is hurting its competitiveness.
• "The reason the startups work is because the people work like hell," Schmidt said.

Remote working has blunted Google's competitiveness in the AI race , says the company's former CEO and chairman, Eric Schmidt .

Schmidt was speaking to students at Stanford University during a lecture in April when he was asked about the lead that startups like OpenAI and Anthropic currently have over Google when it comes to AI .

A recording of Schmidt's lecture was published on Stanford Online's YouTube channel on Tuesday.

"Google decided that work-life balance and going home early and working from home was more important than winning," Schmidt said."And the reason the startups work is because the people work like hell."

"I'm sorry to be so blunt, but the fact of the matter is, if you all leave the university and go found a company, you're not going to let people work from home and only come in one day a week if you want to compete against the other startups."

Representatives for Google didn't immediately respond to a request for comment from Business Insider sent outside regular business hours.

Schmidt was Google's CEO and chairman from 2001 and 2011 before handing the reins back to the search giant's co-founder Larry Page .

He went on to serve as Google's executive chairman and technical advisor before finally departing the company in early 2020.

Schmidt isn't the only executive who thinks remote working has hurt businesses. JPMorgan CEO Jamie Dimon , for one, has been an outspoken advocate for staff to head back to the office.

"It doesn't work for younger kids in apprenticeships, it doesn't really work for creativity and spontaneity, it doesn't really work for management teams," Dimon told The Economist in an interview that aired in July 2023.

To be sure, Google has been easing away from a 100% remote work arrangement for employees since 2022.

Google employees are currently working on a hybrid model where they spend "approximately three days in the office and two days wherever they work best—whether that's at the office or at home," per the company's 2022 Diversity Annual Report .

Google also began tracking office badge attendance and using it as a metric in performance reviews, CNBC reported in June 2023, citing internal memos it had seen.

"Of course, not everyone believes in 'magical hallway conversations,' but there's no question that working together in the same room makes a positive difference," Google's chief people office, Fiona Cicconi, wrote in an employee email obtained by CNBC.