COVID-19 forces Alphabet to pull plug on Page’s pet project

Alphabet has decided to terminate a smart city project in Toronto’s waterfront, a 2.5-year old project undertaken by its subsidiary Sidewalk Labs and a favourite of Google’s co-founder Larry Page.

Daniel L. Doctoroff, CEO of Sidewalk Labs, announced the decision to abandon the Quayside project in an article on Medium, blaming primarily on economic difficulties caused by the on-going Covid-19 pandemic. “As unprecedented economic uncertainty has set in around the world and in the Toronto real estate market, it has become too difficult to make the 12-acre project financially viable without sacrificing core parts of the plan we had developed together with Waterfront Toronto to build a truly inclusive, sustainable community”, Doctoroff said.

The company has “invested time, people, and resources in Toronto, including opening a 30-person office on the waterfront”, according to Doctoroff, though so far it has not built anything yet. It does not even receive the final development approval by the time of its demise, despite that it has been endorsed by governments at the city, provincial, and national level, including being championed by Justin Trudeau, the Prime Minister. The Wall Street Journal cited people familiar with the Toronto situation saying that “Alphabet had poured hundreds of millions of dollars into Sidewalk, with most of that earmarked for the Toronto project, and yet had little to show for it.”

Launched by Larry Page, Sidewalk Labs, a graduate of Alphabet’s Moonshot incubation organisation and now a subsidiary of its Other Bets unit, is one of those wild and weird ideas that cost Alphabet over $26 billion last year but with little returns. In the good old days, the company could afford such luxury, but as the cost of a downward global economy biting in all directions, even Alphabet had to calculate the return on its investment. Since last month the company has practically imposed a hiring freeze on non-essential functions.

Cost aside, there has long been data security and privacy concerns from the community. Sidewalk Labs promised to revolutionise city life with “ubiquitous connectivity, social networks, sensing, machine learning and artificial intelligence, and new design and fabrication technologies”, but these are precisely what concern the very people the Quayside project was meant to appeal to.

Google’s reputation has proceeded Alphabet’s participation in the project, leading Adrian Aoun, Sidewalk’s founder to comment “sometimes it’s easier not to be Google when going after bold ideas.” Prominent opponents to the project include Jim Balsillie, the former CEO of BlackBerry and an Ontario resident. “This is a major victory for the responsible citizens who fought to protect Canada’s democracy, civil and digital rights,” Balsillie said on hearing Alphabet’s decision. “Sidewalk Toronto will go down in history as one of the more disturbing planned experiments in surveillance capitalism.”

In a way this could be seen as a missed opportunity to showcase what smart cities have to offer, which would be encouraging to the flagging flare of IoT. Alphabet would have had the muscle to pull together the end-to-end smart city solutions so many similar trials have failed.