Sundar Pichai, CEO of Google’s parent company, Alphabet, is highlighting the potential risk of a bubble created by rapid growth and increased investment in the AI sector. Pichai, who has been participating in the ongoing debate over whether the industry is an investment bubble, one of the most debated topics of recent months, openly expressed his concerns on this matter.
Could AI be a bubble?
In an interview with the BBC, Pichai described the current wave of investment in the AI sector as an “extraordinary moment,” but also acknowledged the irrational elements in the market.
This comment brings to mind warnings of “irrational exuberance” during the dotcom bubble of the early 2000s. Pichai stated that Google is likely to be affected if the AI bubble bursts, saying, “No company will be immune, including us.”
These warnings come after Alphabet shares have surged nearly 46 percent this year. This surge demonstrates investor confidence in the company’s ability to combat competitors like OpenAI. However, high AI valuations in the US are beginning to weigh on markets, while UK officials have also warned of potential bubble risks.
Despite these concerns, Google continues its investments in artificial intelligence. Alphabet announced in September that it will invest £5 billion in AI infrastructure and research in the UK over two years.
This investment includes the construction of a new data center and additional funding for the DeepMind laboratory in London. Pichai stated that Google will now begin training models in the UK, a move that will support Prime Minister Keir Starmer’s ambition to make the UK the world’s third AI superpower after the US and China.
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