> it is becoming increasingly apparent to Google that it does not know how to capture that value
To paraphrase, its the business model, stupid.
Inventing algorithms, building powerful tools and infrastructure etc is actually a tractable problem: you can throw money and brains at it (and the latter typically follows the former). While the richness of research fields is not predictable, you can bet that the general project of employing silicon to work with information will keep bearing fruits for a long time. So creating that value is not the problem.
The problem with capitalizing (literally) on that intellectual output is that it can only be done 1) within a given business model that can channel effectively it or 2) through the invention of totally new business models. 1) is a challenge: These billions of users on which AI goodies can surface are not customers, they are product. They don't pay for anything and they don't create any virtuous circle of requirements and solutions. Alas, option 2) inventing major new business models is highly non-trivial. The track record is poor: the only major alternative business model to adtech (cloud unit) was not invented there anyway and in any case selling sophisticated IT services whether to consumers or enterprise is a can of worms that others have much more experience in.
For a industrial research unit to thrive, its output must be congruent with what the organization is doing. Not necessarily in the detail, but definitely in the big picture.