Alphabet names Lilly executive Anat Ashkenazi as CFO

Eli Lilly logo is shown on one of their offices in San Diego

By Yuvraj Malik and Bhanvi Satija

(Reuters) -Alphabet named Anat Ashkenazi as its chief financial officer on Wednesday, turning to a top executive from drugmaker Eli Lilly to help steer the Google parent in the generative artificial intelligence era.

Ashkenazi's departure from Lilly was announced earlier in the day. At Alphabet, she will succeed Ruth Porat, the company's longtime CFO whose transition to the role of investment chief was unveiled in July 2023 after years of strong growth.

The executive change comes at a crucial time for Alphabet, which is investing billions of dollars in AI to compete better with Microsoft and grab a share of what is widely seen as the technology industry's next growth driver.

"The AI era is giving us an incredible opportunity to innovate at scale across our core products. I look forward to working with Anat as we invest responsibly to support our next wave of growth," Alphabet CEO Sundar Pichai said.

After Ashkenazi took over as CFO of Lilly in 2021, the drugmaker launched the popular diabetes treatment Mounjaro and weight-loss drug Zepbound that helped quadruple its stock and turned it into the world's most valuable healthcare firm.

"Ashkenazi has helped Eli Lilly become one of the most important companies in the world by wisely investing in the GLP1 (weight-loss) mega trend, helping Lilly achieve leadership in the category," D.A. Davidson & Co analyst Gil Luria said.

"She will be asked to do the same at Alphabet - invest wisely in the AI mega trend in order to help Google achieve leadership in the category."

Ashkenazi will join Alphabet on July 31. Until then, Porat will continue as finance chief, including through the company's second-quarter earnings.

Alphabet's strong first-quarter earnings in April showed some signs that AI integrations were boosting demand for its cloud services, but mounting costs of developing the cutting-edge features have concerned some investors and analysts.

The company's capital expenditure surged 91% to $12 billion in the quarter, and top firms including Microsoft and Amazon have forecast that expenses will be higher in the near term as they continue to develop AI solutions and add server capacity.

Alphabet's shares were 1% higher in early trading, while Lilly edged down 0.5%.

The drugmaker said Ashkenazi will continue to serve as CFO and as a member of Lilly's executive committee through July 2024, adding that an internal and external search for her successor was underway.

(Reporting by Bhanvi Satija and Yuvraj Malik in Bengaluru; Writing by Aditya Soni; Editing by Krishna Chandra Eluri and Shounak Dasgupta)