Google’s parent company Alphabet has warned that no business will be immune if the rapidly expanding artificial intelligence sector experiences a market downturn.
Speaking exclusively to the BBC, chief executive Sundar Pichai said that while the current surge of investment in AI represents an “extraordinary moment”, there are clear signs of “irrationality” similar to previous tech booms.
Alphabet’s valuation has doubled in seven months, driven by optimism around its AI models and new superchips designed to rival Nvidia. But rising valuations across the sector have prompted growing concerns in Silicon Valley about a potential bubble.
Asked whether Google could escape the impact of a collapse, Mr Pichai said: “I think no company is going to be immune, including us.”
He noted that technology cycles often “overshoot”, comparing today’s AI investment climate to the dotcom era. “There was clearly excess investment in the early internet, but no-one today questions how profound it was. AI will follow a similar path,” he said.
His comments come after JP Morgan boss Jamie Dimon also warned that while AI spending will deliver returns, some investment will “probably be lost”.
Mr Pichai said Google’s ability to develop its own chips, models and data gives it a stronger footing than competitors. He also highlighted Alphabet’s growing UK presence, with a £5bn investment pledge covering research, infrastructure and new AI training capabilities at DeepMind.
The Google chief also raised concerns over the “immense” energy demands of AI, which already account for an estimated 1.5% of global electricity usage. He acknowledged that the surge in power consumption has slowed the company’s progress towards its 2030 net zero goal.
Mr Pichai said AI would “create new opportunities” but also reshape the workforce. “It will evolve and transition certain jobs. The people who learn to use these tools will do better,” he said.
