Google and Alphabet CEO Sundar Pichai has issued one of his strongest cautions yet about the overheating AI market, telling the BBC that “no company is going to be immune, including us,” if the current AI investment boom deflates.
In an exclusive interview at Google’s California headquarters, Pichai said the explosive growth in AI spending has created an “extraordinary moment,” but one that includes clear signs of “irrationality” reminiscent of past tech bubbles.
His comments arrive as valuations across the AI sector soar to historic highs, and fears mount in Silicon Valley that capital is flowing faster than real revenues justify.
AI Boom: Extraordinary, But Overheating
Alphabet’s market value has doubled in just seven months, reaching $3.5 trillion, as investors bet that Google can defend its dominance against OpenAI and other rivals.
Some of the biggest focus is on Google’s in-house ecosystem:
- custom AI superchips designed to compete with Nvidia
- its training data advantage via Search, YouTube, and Android
- DeepMind’s breakthroughs in frontier models
Even so, Pichai said investment cycles often overshoot, comparing today’s enthusiasm to the dot-com era.
“I expect AI to be the same. There’s both rational and irrational investment through a moment like this.”
The warnings echo earlier remarks from JPMorgan CEO Jamie Dimon, who predicted that while AI investments will pay off, “some of the money will probably be lost.”
A Bubble Won’t Spare Anyone, Not Even Google
Asked directly whether Google could withstand a collapse in AI valuations, Pichai said the company is better positioned than most — but not shielded entirely.
“No company is going to be immune, including us.”
Alphabet’s advantage, he explained, comes from owning the full stack of AI technologies, from chips to data to models — giving it more resilience than firms dependent on outside suppliers.
UK Expansion and “Superpower” Status
Pichai confirmed Alphabet will significantly expand AI operations in the UK, following its £5 billion investment commitment.
For the first time, he said Google will train its frontier models in the UK, something ministers hope will help the UK cement its ambition of becoming the world’s third AI superpower, behind the US and China.
DeepMind, based in London, will play a key role in this expansion.
The Energy Problem: AI’s Growing Hunger
Pichai also acknowledged that AI’s exploding energy requirements are putting pressure on Alphabet’s climate commitments.
AI now accounts for 1.5% of global electricity consumption, according to the IEA.
“The energy needs are immense… you don’t want to constrain an economy based on energy.”
He admitted Alphabet’s path toward its 2030 net-zero target is being affected by AI’s rapid growth, but said the company remains committed to the goal.
AI’s Impact on Jobs: Disruption and Opportunity
Pichai called AI “the most profound technology humanity has worked on,” warning that it will cause major societal and workforce disruptions.
“It will evolve and transition certain jobs… people will need to adapt.”
He said every profession, from teaching to medicine, will continue to exist, but those who learn to use AI tools will “do better.”
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
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