Verily, the life sciences subsidiary of Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL), has set a deadline to sever its ties with Google by December. This move is seen as a crucial step towards Verily's goal of becoming an independent company.

What Happened: Verily has set a deadline of Dec 16 to cut ties with Google, as per internal documents, reported Business Insider citing sources familiar with the matter. This includes severing connections to Google's cloud infrastructure and employee benefits.

Despite the separation, Verily will remain a part of Alphabet. However, the company's leadership has emphasized the necessity of these efforts for Verily to eventually operate as an entirely independent entity.

Verily's transition from Google's infrastructure is being driven by its secret Flywheel project, which was first reported by Business Insider in 2021. This project is considered a crucial stepping stone towards Verily's independence.

Employees have already been issued new laptops, office badges, and email addresses that are no longer aliases of the Google email domain. They will also lose access to Google's employee benefits by the end of December, receiving new benefits fully dictated by Verily.

Why It Matters: The move to separate Verily from Google comes at a time when the tech giant is facing increased regulatory scrutiny. The U.S. Department of Justice is reportedly preparing to request a court order that would force Google to divest its Chrome browser, following a ruling in August that found Google guilty of illegally monopolizing the search market.

Despite these challenges, Alphabet has been making significant strides in its AI technology. The company recently announced that its AI assistant, Gemini, is now available for download on Apple Inc.'s iPhone as an app, offering a "free-flowing conversation" feature.

Alphabet is also receiving praise for its AI technology from industry leaders. Salesforce CEO Marc Benioff recently lauded Google's AI tool, Gemini Live, as "truly groundbreaking."

Price Action: Alphabet Inc. Class A shares closed at $175.30 on Monday, gaining 1.63% for the day. In after-hours trading, the stock declined 1.00%. Year to date, Class A shares have risen by 26.87%. Meanwhile, Alphabet Inc. Class C shares ended the day at $176.80, up 1.67%. After hours, the stock dipped 0.83%. Year to date, Class C shares have increased by 26.68%, according to data from Benzinga Pro.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.