Schmidt will transition into a new role as a technical advisor on science and technology issues beginning at Alphabet's next board meeting in January 2018. Alphabet's board is expected to appoint a new, non-executive chairman at that time. Other Silicon Valley giants, including Apple Inc. (AAPL) - Get Report and Microsoft Inc. (MSFT) - Get Report , also have non-executive chairman.
"Larry, Sergey, Sundar and I all believe that the time is right in Alphabet's evolution for this transition," Schmidt said in a statement. "The Alphabet structure is working well, and Google and the Other Bets are thriving."
He added that in recent years, "I've been spending a lot of my time on science and technology issues, and philanthropy, and I plan to expand that work."
Schmidt joined Google as its CEO in 2001. At the time, it was presumed that Schmidt was brought on to serve as adult supervision for Google's young co-founders, Larry Page and Sergey Brin. In 2011, Schmidt handed the reigns back to Page, who re-assumed the CEO role, while he went on to become executive chairman. Schmidt later transitioned to become the executive chairman of Alphabet when the holding company was announced in 2015.
While CEO of Google, Schmidt helped steer the seven-year-old company through its highly-anticipated initial public offering in 2004, when the stock debuted at $85 a share.
He also played an instrumental role in Google's hypergrowth as a business. At the time of Google's IPO, it was worth roughly $27 billion; now, the Alphabet parent company (of which the bulk of revenues come from Google) is worth approximately $741 billion.
Alphabet oversees its core Google search business and the numerous moonshot bets exploring emerging technologies such as glucose-sensing contact lenses and delivering remote internet access via balloons. The new structure has made it much easier for the Google subsidiary (which includes the search business, Google Cloud, YouTube, Android and Chrome) to remain separate from the hodgepodge of "Other Bets" overseen by Alphabet and which Page referred to as "bets in areas that might seem speculative or even strange."
In recent years, Schmidt has gotten more and more involved in social and political issues. He's a well-known donor to various political candidates and causes, backed a startup that aided Hillary Clinton's presidential campaign and maintained a good relationship with former President Barack Obama. Schmidt also has a family foundation that funds environment and energy causes.
Shares of Alphabet were unchanged in after-hours trading on Thursday. The stock has climbed 38% so far this year vs. the Nasdaq's gain of 29%.
More of What's Trending on TheStreet:
- Our Holiday Gift to You! 14 of Jim Cramer's AAP Picks
- How Bitcoin $50,000 by the End of 2018 Could Happen
- The 25 Biggest Tech Stories of 2017
- 25 Great Holiday Beers For Your Winter Fridge