Google CEO Offers Warning on Potential AI Bubble

Google CEO Sundar Pichai has cautioned that no company, including his own, is immune to the risks of an "AI bubble" bursting. In an interview with the BBC, Pichai acknowledged there's "irrationality" in the current surge of investment in artificial intelligence, describing the moment as "extraordinary" but warning that the industry could "overshoot" as it has with past tech booms. Gizmodo notes Pichai is not the first to warn about a potential overvaluation of AI stock; investor Michael Burry (who successfully bet against the US housing market ahead of the 2008 financial crisis, as recounted in The Big Short) and the Bank of England have also recently done the same, and even OpenAI CEO Sam Altman and Jeff Bezos have indicated some degree of concern.

The comments come as Alphabet, Google's parent company, has seen its shares double in seven months. Pichai compared the current moment to the dotcom bubble of the late 1990s, echoing former Fed chair Alan Greenspan's famous warning about "irrational exuberance" years ahead of the 2000 market crash. Pichai said there was "excess investment" in the internet back then, but today, "none of us would question whether the internet was profound. I expect AI to be the same."

While Alphabet's revenues are surging and the company is expanding its AI footprint—including in the UK, where it has pledged $6.5 billion for infrastructure and research—Pichai said that the industry's rapid growth comes with significant risks. He pointed to AI's growing energy demands, which now account for 1.5% of global electricity use, and admitted Alphabet's climate targets have slipped as a result. Still, he reiterated the company's commitment to reaching net-zero emissions by 2030.

story continues below

Pichai also addressed the broader societal impact of AI, describing it as "the most profound technology" humanity has worked on. He predicted that AI will disrupt jobs but also create new opportunities, emphasizing that those who adapt to the technology will thrive. "It doesn't matter whether you want to be a teacher [or] a doctor," he said. "The people who will do well in each of those professions are people who learn how to use these tools."