If the fear of the AI bubble bursting was already keeping people up at night, Alphabet CEO Sundar Pichai’s recent comments certainly won’t help.
The Google chief talks all things AI in an exclusive interview with the BBC – from energy demand to UK investment to the future of jobs. But the most shocking moment came when Pichai admitted that if the AI bubble bursts, no one is safe.
“I think no company, including ours, will be untouched by this,” he told the BBC.
In the interview, Pichai said that while the AI field has seen tremendous growth, there is also a lot of “irrationality” fueling the bullishness as valuations and investments rise. He warned that the industry can “overshoot” during such hype cycles, a direct parallel to the dot-com boom and bust of the late 90s and early 2000s.
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The value of early Internet companies skyrocketed due to pure optimism in the dot-com era, but the bubble burst in 2000, wiping out hundreds of companies and countless jobs.
The concern now is that AI may follow a similar trajectory. Big Tech valuations have soared in recent months: Alphabet has reached a valuation of $3.5 trillion, OpenAI has reportedly hit a valuation of $500 billion, and NVIDIA became the first company to cross the $5 trillion mark.
But cracks have started appearing. Over the past few weeks, several major investors have begun selling NVIDIA stock. On Monday, it was reported that Peter Thiel’s hedge fund exited its entire $94 million position. Even more eyebrow-raising is that Michael Burry – famous for predicting the mortgage crisis of 2007-08 – is reportedly betting against NVIDIA and Palantir.
Despite all this, Pichai himself seems largely unfazed.
“We can look back at the Internet now. There was obviously a lot of investment, but none of us would question whether the Internet was deep,” he told the BBC. “I expect AI to be the same way. So I think it’s both rational and there are elements of irrationality in a moment like this.”
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artificial intelligence google