Deep dive · AI research · Accounts to December 2024

Inside the accounts · How does Google DeepMind really make its money?

Google DeepMind's UK company doesn't employ its workforce: other Alphabet companies charged it £1.0bn for staff and paid it £1.3bn for research

DeepMind Technologies Limited is the London company behind Google DeepMind, Alphabet's artificial intelligence lab. Its accounts for 2024 show £1,325m of turnover and £174m of profit after tax, every pound of the turnover paid by other companies in the Alphabet group for research and development. They show who pays, how the fee is set, why turnover fell while profit rose, and a company whose workforce is employed elsewhere: other Alphabet companies charged it £1,012m for staff and related costs. Where a figure says something about how the lab is run, we explain it.

CompanyDeepMind Technologies Limited · 07386350

AccountsAccounts to December 2024 PDF ↗

ByJames Sproule · 28 September 2026

Reading time9 min read

£1.33bnTurnover, down 13.2%, all from other Alphabet companies

£1.01bnStaff and related costs, all recharged by group companies

£174mProfit after tax, up 54%: £13.12 in every £100

£118.94Billed for every £100 of costs, up from £109.80

In 60 words

The answer

Google DeepMind's UK company makes its money from the rest of Alphabet. It does AI research and development for other group companies and bills them its costs plus a margin: £1,325m in 2024. Its workforce is employed by other Alphabet companies, which charged it £1,012m for staff and related costs. It kept £174m after tax and paid no dividend.

The business model

A research lab with one customer: its own group

The company "specialises in AI systems development through the provision of research and development services to other group undertakings" (p. 2). It doesn't sell to the public, to businesses or to governments; the accounts mention no customer outside Alphabet. Its turnover "represents research and development remuneration from other group undertakings" (p. 2). The money goes round in a circle, and the accounts show each step.

Step 1

Group companies employ the people

"The Company's workforce is directly employed by other Alphabet group companies" (p. 3).

No staff numbers given

Step 2

They recharge the cost

Staff and related costs "are arrived at after recharges received of £1,011.9 million ... from group companies" (p. 20).

£1,012m of recharges

Step 3

The company does the research

Research costs are "expensed in the period in which they are incurred", and none is capitalised (p. 17).

£1,114m of admin expenses

Step 4

It bills the group, with a margin

"The Company incorporates a margin in the calculation of its service fees" (p. 16).

£1,325m of turnover

Background, not from the accountsGoogle bought DeepMind, a London AI start-up, in 2014. In April 2023 it merged DeepMind with its Google Brain team to form Google DeepMind, the lab behind the Gemini models and AlphaFold. The accounts mention the merger only to say it "had no impact on the operations of the company" (p. 2). They don't name any model or product.

The profit and loss account

Google DeepMind on one page

The profit and loss account is short: turnover, one line of administration expenses, a little other income, interest and tax (p. 11). There is no cost of sales. Note 7 splits out the one cost that matters: staff costs and other related costs of £1,011.9m, 91% of admin expenses (p. 20).

From £1,325m of turnover to £174m of profit, 2024Staff and related costs, all recharged by other group companies, took £1,012m. Operating profit was £217m.

Totals
Costs and charges
Income and credits

Statement of profit and loss, p11; note 7, p20. 'Other admin costs' is admin expenses less staff and related costs: our split.

For every £100 of turnover, the company kept £13.12Per £100 of turnover. All of it came from other Alphabet group companies.

Staff and related costsrecharged by group companies£76.35

Other admin costsnot broken down£7.73

Back in: other incomenot explained£0.46

Back in: net interestmostly on loans to the group£1.03

Tax24.7% of pre-tax profit£4.30

Kept as profitno dividend for 2024£13.12

Statement of profit and loss, p11; notes 7 and 8, p20. Our split.

£217.2m

operating profit, up 59% from £136.2m, though turnover fell £201.5m. Admin expenses fell faster, by £276.3m, and there was £6.1m of other operating income, which the accounts don't explain (pp. 11 and 20).

16.4%

operating margin, against 8.9% in 2023. With £13.6m of interest, profit before tax was £230.8m; tax of £57.0m left £173.9m (pp. 11 and 20).

What this means for the labThis company isn't paid for what its research turns into. It is paid for doing the research, at a fee worked out from its own costs. So its profit says little about whether Google DeepMind's work makes money for Alphabet. It measures the margin the group has agreed to pay its UK research arm, and that is a decision inside the group.

Turnover

Where the money comes from

One source. Turnover of £1,325,389,000, down from £1,526,876,000, is "research and development remuneration from other group undertakings" (pp. 2 and 4). Note 5 adds nothing: "An analysis of turnover is not disclosed in line with Schedule 1 of Statutory Instrument 2008 No.410" (p. 20).

Paid as it goes. The work is done under "service agreements with other group undertakings for the provision of contract research and development services". Revenue is recognised "over time, as the customer simultaneously receives and consumes the benefits as the service is provided" (p. 16).

A fee set from the numbers. The company uses "an output method, based on underlying financial results as agreed between parties", and "incorporates a margin in the calculation of its service fees" (p. 16). Where the price varies, it estimates "the most likely amount".

No branches abroad

"The Company at no time during the year had any branches outside the United Kingdom" (p. 4). The research is billed from London.

£3.9m

of "academic donations and sponsorships", down from £14.4m. There were no political donations (p. 4).

What this means for the labThe fee follows the costs, so turnover moves with spending rather than with demand. That is why turnover fell in 2024: the group recharged less to the company, and the company billed less back. The auditor says it "reviewed company's transfer pricing policy and tested recharge workings" (p. 10). Transfer pricing is the set of rules on what companies in one group charge each other.

Not disclosed. Which group companies pay the fees, or how much each pays. The margin itself, or which costs it is applied to. Whether any of the turnover relates to particular projects, such as Gemini or AlphaFold. The accounts don't mention Isomorphic Labs or any other company outside this one's parent chain.

The finding

A £1.3bn AI lab whose workforce is employed elsewhere

Under "Our people", the strategic report has one sentence: "The Company's workforce is directly employed by other Alphabet group companies" (p. 3). There is no note giving the number of employees, their wages or pensions. Note 7 gives staff costs and other related costs of £1,011.9m, and says they "are arrived at after recharges received of £1,011.9 million (2023: £826.2 million) from group companies" (p. 20). The two figures are the same: the whole cost came in as a recharge.

Up 22%. Staff and related costs rose £185.8m, from £826.2m. They took £76.35 of every £100 of turnover, against £54.11 in 2023 (pp. 11 and 20).

Everything else fell 82%. Admin expenses other than staff fell from £564.5m to £102.4m, our subtraction. The directors put the fall in admin expenses down to "a reduction in recharges from group undertakings" (p. 2). They don't say which recharges, or what the £462.0m covered.

The talent risk is the group's. The company "relies upon other group undertakings to provide talent who are an integral part of the specialist research and development services performed by the Company" (p. 2).

Staff costs rose £186m; other costs fell £462mAdmin expenses fell £277m in all, 'driven by a reduction in recharges from group undertakings' (p2).

Staff and related costs
Other admin costs

Statement of profit and loss, p11; note 7, p20. Other admin costs by subtraction.

What this means for the labThe people who work at Google DeepMind in London are on another Alphabet company's payroll; this company buys their time and bills it on. So its accounts can't tell you how many researchers the lab has, what they are paid, or how much of the £1.0bn is salaries rather than offices, equipment or share awards. Our comparison tables show pay per head as not applicable, as for The R&A. The auditor treated "recharging payroll and administrative related costs from other group companies" as the area where fraud or override was most likely to arise (p. 10).

Not disclosed. The average number of employees, for either year. Wages, social security, pensions and share-based payments: whether any Alphabet share awards are in the £1,011.9m isn't said. Directors' pay: there is no directors' remuneration note, and the auditor has nothing to report on it (p. 9). The greenhouse gas note does refer to business travel by "the Company's employees and candidates" (p. 6); the accounts don't reconcile that with page 3.

Turnover down, profit up

Why profit rose 54% on falling turnover

For every £100 it spent, it billed £118.94, up from £109.80Turnover fell 13%, but costs fell faster, so operating profit rose 59%.

Turnover per £100 of admin expenses

Statement of profit and loss, p11. Our calculation: the accounts say a margin is included (p16) but not what it is.

Costs fell further than turnover. Turnover fell £201.5m, or 13.2%. Admin expenses fell £276.3m, or 19.9% (p. 11). Because the fee is built from costs plus a margin, profit depends on the margin, not on how much is spent.

The margin roughly doubled. In 2023 the company billed £109.80 for every £100 of admin expenses. In 2024 it billed £118.94. This is our calculation from the profit and loss account; the accounts don't give the rate, and some costs may carry a different margin from others, or none.

Profit followed. Operating profit rose from £136.2m to £217.2m, and profit after tax from £112.9m to £173.9m (p. 11).

What this means for the labOne reading is that the costs that fell carried little or no margin, such as costs passed through at cost, while the staff costs that rose carry a mark-up. That would explain a smaller turnover with a bigger profit. The accounts don't confirm it: they say only that the fee is based on "underlying financial results as agreed between parties" (p. 16). Either way, the lab's profit is set by the group's pricing policy, which the tax authorities can review.

Not disclosed. The mark-up, the cost base it is applied to, and why the effective margin changed between the years. Computing costs, cloud and data centre charges: the accounts don't mention them at all, so we can't say whether any are in the £102.4m of other costs or sit in other Alphabet companies.

Tax

Tax at close to the UK rate

Tax took 24.7%, close to the UK rateHalf the charge is current tax; the other half uses up tax losses from earlier years, so the deferred tax asset fell from £43.4m to £14.2m.

Tax at the UK rate of 25%on £230.8m of profit before tax£57.7m

Expenses not deductible£739k

Earlier yearsreduces the bill£1.5m

Tax charge for the year24.7% of profit before tax£57.0m

of which paid now: current tax£27.7m

of which deferred: losses usedold losses set against profit£29.2m

Note 9, pp20–21; note 16, pp23–24.

£57.0m on £230.8m. Tax at 25% would have been £57.7m. Expenses that can't be deducted added £0.7m and adjustments for earlier years took off £1.5m, giving a charge of £56,954,000, an effective rate of 24.7% (p. 21).

Half of it uses up old losses. Current tax was £27.7m. The other £29.2m is deferred tax: the company set earlier tax losses against its profit, and the deferred tax asset for losses fell from £42.4m to £13.1m (pp. 20 and 24).

HMRC owes it money. At the year end the company was owed £90.0m of corporation tax, up from £58.8m, and £121.5m of VAT, up from £106.9m (p. 22). The accounts don't explain the corporation tax balance. Note 4 names the research and development expenditure credit as a key estimate, without giving a figure (p. 19).

What this means for the labWith a group pricing arrangement, the tax question is whether the margin is high enough to leave a fair profit in the UK. The accounts say "contingent liabilities exist" relating to "reviews for open tax years", that "communications with tax authorities are ongoing", and that more detail "is not made on the grounds that it would seriously prejudice the Company" (pp. 24–25). On the global minimum tax, the company says it is not subject to top-up taxes on current assessments, though "it is possible" it may be in 2026 (p. 21).

Not disclosed. Which tax years or authorities are involved in the reviews, or the amounts at stake. The size of any R&D expenditure credit. A £4m deferred tax asset is not recognised "due to insufficient certainty" (p. 21); the accounts don't say what it relates to.

Balance sheet

£176,000 of equipment and no patents

Almost everything it owns is money owed to it£459.1m is owed by group companies, including its cash in the group pool. Fixed assets are £1.3m.

Owed by the group (incl. cash pool)
VAT receivable
Corporation tax receivable
Deferred tax and prepayments

Statement of financial position, p12; notes 13 and 14, pp22–23.

Almost no fixed assets. The company's tangible assets are £176,000 of furniture and fixtures. Its IT equipment cost £709,000 and is fully depreciated (p. 22). The only intangible asset is £1.2m of goodwill, not amortised under a "true and fair view override" (pp. 14 and 22).

Nothing capitalised. "Research and development costs are expensed in the period in which they are incurred", and the company "currently incurs no development costs which would meet the criteria for capitalisation" (p. 17). No patents, software or models appear on the balance sheet.

Cash in the group pool. There is no cash line. The company takes part in "an intragroup cash pooling program", so its cash is part of the £459.1m owed by group companies, up from £332.1m (pp. 18 and 22). Most of the £13.6m of interest income came from "intercompany loans", £11.1m (p. 20).

No dividend for 2024. In 2023 the company paid £175m to its parent: the dividend per share was "£175 million", because it has one ordinary share of £0.0001 (pp. 21 and 24). For 2024 it paid nothing, so net assets rose by the year's profit, from £382.2m to £556.1m (p. 13).

Old losses, still showing. Shareholder's funds are a £1,114.8m capital contribution less £558.8m of accumulated losses, down from £732.6m (p. 12). The accounts don't say when the contribution was made.

Little owed. Creditors are £131.3m, mostly £118.0m owed to group companies, "non-interest bearing and repayable on demand". There are no borrowings (p. 23).

Net assets rose £174m, with no dividend2023: profit of £112.9m, less a £175m dividend on the company's one share. 2024: all £173.9m kept.

Net assets

Statement of changes in equity, p13; note 10, p21.

What this means for the labThe balance sheet of one of the world's best-known AI labs holds no computers of value and no intellectual property. The accounts don't say who owns what the lab invents. What they show is that the customer "receives and consumes the benefits as the service is provided" (p. 16), and that this company records no research as an asset. Our reading is that the results sit with the group companies that pay for the work, not here. The same goes for computing power: the company's energy use, 7.4 million kWh, is for "purchased electricity and purchased heating" at premises it controls, and the energy section describes offices (pp. 5–6).

Not disclosedThe 2024 accounts show a £1,114.8m capital contribution in reserves but don't say when it was made or what it was for.

Not disclosed. Who owns the intellectual property the lab creates. How much of the £459.1m owed by the group is pooled cash and how much is loans or unpaid fees. What the £1.2m of goodwill came from.

Ownership

Who owns the company behind Google DeepMind

1 share

£0.0001, fully paid

Owned by DeepMind Holdings Limited, incorporated in the UK, the immediate parent (pp. 14, 24).

Google LLC

The backer

The intermediate parent has given "written assurances" that it will provide "adequate financial support" for at least twelve months (pp. 4 and 14).

Alphabet Inc.

Ultimate control

"The ultimate holding company and ultimate controlling party is Alphabet Inc.", which consolidates these accounts (p. 24).

Dealings with the group, mostly unlisted. The company "has taken advantage of the exemption under paragraph 8(k) of FRS 101 not to disclose transactions with fellow wholly owned subsidiaries of Alphabet Inc.". The only related-party figures are those already in notes 5, 7, 8, 10, 13 and 15: turnover, recharges, interest, the dividend and group balances (p. 24). Two directors served during the year (p. 4).

What this means for the labThere are no outside shareholders and no outside customers. Everything that matters, from the fees it earns to the people it relies on, is decided inside Alphabet. Alphabet's own consolidated accounts, published in the US, are where the lab's value to the group would show.

In the directors' words

The risks they name

AI systems development is an emerging market characterised by continuous change and intense competition.
Market risks, p. 2

Evolving laws and legal systems, may adversely affect the Company's revenues and could subject the Company to new regulatory costs and challenges (including the transfer of personal data between the EU and the United Kingdom).
Evolving laws and legal systems, p. 2

Failure of other group undertakings to attract and retain talent could adversely impact the business' ability to develop cutting edge AI capabilities for group undertakings.
Talent retention, p. 2

In plain termsThe lab's risks are competition, regulation and people. Its answer to the first is "a well-informed risk based approach for decision making" (p. 2). The people risk sits with the group companies that employ the staff. The directors say "there are no future changes anticipated in the business of the Company at this time" (p. 4).

Not disclosed. Any named competitor, any figure for the cost of regulation, and any risk from the group changing the fee arrangement, though that would change the company's turnover and profit directly.

Two years side by side

Year on year

2024 against 2023Percentage change, one scale.

Turnover£1,526.9m → £1,325.4m-13%

Admin expenses£1,390.6m → £1,114.3m-20%

Staff and related costs£826.2m → £1,011.9m+22%

Other admin costs£564.5m → £102.4m-82%

Operating profit£136.2m → £217.2m+59%

Profit before tax£148.4m → £230.8m+55%

Tax£35.5m → £57.0m+60%

Profit after tax£112.9m → £173.9m+54%

Academic donations£14.4m → £3.9m-73%

Owed by group companies£332.1m → £459.1m+38%

Net assets£382.2m → £556.1m+45%

Statement of profit and loss p11, statement of financial position p12, directors' report p4, notes 7 and 13, pp20–22.

Show the figures as a table

Measure	2024	2023
Turnover	£1,325.4m	£1,526.9m
Administration expenses	£1,114.3m	£1,390.6m
of which staff and related costs (recharged)	£1,011.9m	£826.2m
of which other costs (our subtraction)	£102.4m	£564.5m
Other operating income	£6.1m	nil
Operating profit	£217.2m	£136.2m
Interest receivable	£13.6m	£12.2m
Profit before tax	£230.8m	£148.4m
Tax	£57.0m	£35.5m
Profit after tax	£173.9m	£112.9m
Dividend to parent	nil	£175.0m
Employees	not given	not given
Academic donations and sponsorships	£3.9m	£14.4m
Owed by group companies	£459.1m	£332.1m
Tangible fixed assets	£176,000	£284,000
Net assets	£556.1m	£382.2m

There is no cash flow statement; the company uses the FRS 101 exemption (p. 15). Tax for 2023 was at a blended rate of 23.52%, as the UK rate rose from 19% to 25% in April 2023 (p. 21).

Quick answers

Questions about Google DeepMind

How does Google DeepMind really make its money?

Where does Google DeepMind's money come from?

From the rest of Alphabet. DeepMind Technologies Limited, the UK company behind Google DeepMind, had £1,325m of turnover in 2024, down from £1,527m, and all of it is 'research and development remuneration from other group undertakings'. It is paid under service agreements with a margin built into the fees. The accounts mention no customer outside the group and don't split the turnover.

How many people work for Google DeepMind's UK company?

The accounts don't say. 'The Company's workforce is directly employed by other Alphabet group companies', and there is no note giving an average number of employees. Staff and related costs of £1,011.9m, up from £826.2m, all came in as recharges from group companies.

Why did Google DeepMind's profit rise when its turnover fell?

Because its fee is built from its costs plus a margin, and the margin rose. Turnover fell 13% to £1,325m, but admin expenses fell 20% to £1,114m, so operating profit rose from £136m to £217m and profit after tax from £113m to £174m. By our calculation it billed £118.94 for every £100 of costs, against £109.80 in 2023. The accounts don't give the margin.

Who owns Google DeepMind?

DeepMind Technologies Limited's one share is owned by DeepMind Holdings Limited, a UK company. Google LLC, the intermediate parent, has promised financial support, and the ultimate controlling party is Alphabet Inc. The company paid no dividend for 2024, after £175m in 2023.

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