Google CEO warns no firm is safe if AI bubble bursts

LONDON: Alphabet chief executive Sundar Pichai said on Tuesday (Nov 18) that no company would be spared if the artificial intelligence investment boom collapses, as soaring valuations and massive spending fuel concerns of a bubble.

Pichai told the BBC the current wave of AI investment was an "extraordinary moment" but acknowledged "elements of irrationality" in the market, echoing worries over "irrational exuberance" in the dotcom era.

Asked how Google would cope if the bubble bursts, Pichai said the company could weather the storm but added: "I think no company is going to be immune, including us."

Alphabet shares have risen about 46 per cent this year as investors bet on its ability to compete with ChatGPT-maker OpenAI, but analysts have increasingly questioned whether AI valuations are sustainable.

MARKET RISKS AND GOOGLE’S POSITION

In the United States, high valuations have begun weighing on broader markets, while British policymakers have also warned of bubble risks.

In September, Alphabet pledged £5 billion over two years for UK AI infrastructure and research, including a new data centre and investment in its London-based lab DeepMind.

Pichai also said Google would begin training models in Britain, a move Prime Minister Keir Starmer hopes will advance his goal of making the UK the world’s third AI “superpower” after the United States and China.

He warned, however, of the "immense" energy requirements of AI and said Alphabet’s net-zero targets would be delayed as the company expands computing power.