NEW YORK, Jan 16, 2026, 10:37 (EST) — Regular session
- Alphabet’s non-voting Class C shares (GOOG) dropped roughly 1% in early trading, underperforming the Nasdaq 100.
- Investors mulled over book publishers’ latest move to jump into a lawsuit concerning Google’s AI training data, alongside renewed focus on limits to data-center expansions.
- Coming up: a potential YouTube-BBC content deal could be announced as early as next week, with Alphabet’s earnings call set for February 4.
Alphabet’s Class C shares fell Friday, retreating from recent peaks as investors weighed a fresh legal challenge linked to Google’s AI training alongside growing skepticism toward expensive megacaps. The non-voting shares dropped $3.16, roughly 0.9%, to $330.00 in early trading.
The decline arrives as certain investors shift focus away from the AI surge, searching for new leaders to emerge. Angelo Kourkafas, senior global investment strategist at Edward Jones, noted, “There is a lot of hope that this is going to be the year where we are going to see some true broadening of leadership.” 1
Alphabet has emerged as a key indicator in this shift, positioned at the crossroads of two hot-button issues: the ROI of AI investment and the legal/regulatory hurdles it faces. Its recent rally came on the back of a multiyear AI deal with Apple linked to Google’s Gemini models, which helped revive confidence in Alphabet’s AI ambitions. 2
Broader indexes held firm. The Nasdaq 100 tracker barely budged, and the S&P 500 ETF slipped slightly.
Publishers Hachette Book Group and Cengage Group have filed a request in a California federal court to join a proposed class action accusing Google of using copyrighted material without authorization to train its AI systems — “training” here refers to feeding data into a model to help it recognize patterns. “We believe our participation will bolster the case,” said Maria Pallante, CEO of the Association of American Publishers. 3
This case adds to the mounting tally of AI-related disputes investors are weighing—not only for headline risks but also for possible costs and limits on product launches. For Alphabet, it’s significant since Gemini is aimed to serve as a foundational layer across search, cloud, and device offerings.
Another chokepoint lies in the physical infrastructure behind these models. A Google energy exec revealed this week that hooking data centers up to the U.S. electrical grid has become the company’s top hurdle, with connection wait times exceeding a decade in some regions. “Transmission barriers are the number one challenge we’re seeing on the grid,” said Marsden Hanna, Google’s global head of sustainability and climate policy. 4
Fresh developments came from YouTube, Alphabet’s leading consumer video platform. According to the Financial Times, the BBC is set to produce programmes specifically for YouTube for the first time. Reuters added a deal could be announced as soon as next week. The BBC plans to customize shows for YouTube initially, then later air them on iPlayer and Sounds, aiming to boost revenue by selling ads internationally. 5
The setup works both ways. Should the court let publishers join the AI-training lawsuit, the risks could escalate, prompting other rights-holders to jump in. Meanwhile, persistent grid constraints could make the AI expansion that supports the bull argument seem pricier and slower—just as investors grow more wary of valuations.
Alphabet’s next major event is its Q4 and full-year earnings call on Feb. 4 at 1:30 p.m. Pacific (4:30 p.m. Eastern). Investors will be focused on ad revenue trends, the pace of Google Cloud’s growth, and projections for AI-related expenses. 6
