Yahoo Finance Alphabet Taps Eli Lilly Executive as New CFO Replacing Porat
(Bloomberg) -- Alphabet Inc. named Eli Lilly & Co. executive Anat Ashkenazi as its new chief financial officer, replacing Ruth Porat who announced last year she planned to step down.
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Ashkenazi, 51, has served as CFO and executive vice president at the drug maker, where she worked for more than 23 years, Alphabet said in a filing Wednesday morning. Her new position is effective July 31.
Porat, 66, who took over as CFO for Google in 2015, oversaw the search giant’s transition into the current structure under Alphabet and has taken on a new role at the company as president and chief investment officer. As the company’s longest-serving CFO, she famously ushered in a period of greater fiscal discipline at Alphabet, oversaw growth of the cloud computing unit, which became profitable last year, and YouTube, now the most popular streaming service on television.
For the past year, Porat has overseen Alphabet’s investments in its Other Bets division, an eclectic collection of nascent businesses such as life sciences unit Verily and autonomous driving startup Waymo that the company is working to nudge toward profitability.
Ashkenazi, who served as Eli Lilly’s CFO since 2021, oversaw the finance chiefs of the commercial business as well as those for research and development and manufacturing and quality, and also led the corporate strategic planning team and business transformation office. During Ashkenazi’s time as CFO, Lilly launched Mounjaro and Zepbound, drugs for diabetes and weight-loss that have made it the most valuable pharmaceutical company in the world.
Her move to Alphabet is “very tough to question despite the monster of a pharma (and consumer) play Lilly has become,” said Jared Holz, an analyst at Mizuho Group. The Alphabet CFO “gig is probably one of the best in corporate America.”
Alphabet shares gained 1.3% Wednesday morning in New York.
Ashkenazi steps into the role at a pivotal moment for Alphabet. The company, valued at more than $2 trillion, has reoriented its teams and focus around generative artificial intelligence, which can answer questions in a conversational tone based on people’s prompts. The company has already served billions of queries with its generative AI features. But the computing power and costs associated with the technology is enormous. Ashkenazi will need to manage Alphabet’s books as the company continues to invest heavily in data centers and compete with other tech giants for talented employees.
She will be based in the San Francisco Bay Area, reporting to Alphabet Chief Executive Officer Sundar Pichai.
“We’re very pleased to have found such a strong CFO, with a track record of strategic focus on long-term investment to fuel innovation and growth,” Pichai said in a statement. “The AI era is giving us an incredible opportunity to innovate at scale across our core products, and to create entirely new products and experiences for our users and customers. I look forward to working with Anat as we invest responsibly to support our next wave of growth.”
Health Care Advantage
Ashkenazi’s background in health care may also play a part in boosting Alphabet’s reputation in a sector with vast potential in generative AI, said Mandeep Singh, an analyst at Bloomberg Intelligence. She “could help expand Alphabet’s addressable market and help catalyze some of its moonshots,” Singh said, “given her background and the availability of data in health care as a generative AI application.”
Alphabet has been trying to revolutionize health care for years, with varied success. Recently, the company announced a slew of initiatives to deploy its AI models in the health care industry, including a tool that will help Fitbit users glean insights from their wearable devices. Last year, Google unveiled Med-PaLM, an AI model that has capably fielded medical questions. The announcements followed a broad shift in strategy for the company in 2021, in which it moved to embed health-care research and other functionality in its core products like search and YouTube, rather than starting new commercial services.
But the efforts have left some of its moonshot goals in health care, embodied by Alphabet units like Verily and the life-extension company Calico, to somewhat languish. Ashkenazi may play a vital role in re-prioritizing efforts that once made eye-catching headlines.
Alphabet’s shares are up about 40% over the past year and the company reported quarterly profit that increased by more than half in the first quarter. YouTube and the cloud business are expected to end 2024 at a combined annual run rate of more than $100 billion, Alphabet has said. The company also announced its first cash dividend in April, a welcome sign to investors after months of heavy spending on AI.
(Updates with Alphabet CEO comments in 10th paragraph.)
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