Google CEO Sundar Pichai has issued a cautionary note on the soaring artificial intelligence sector, warning that no tech company — not even Google — would be immune if the current AI boom were to collapse.
In an interview with the BBC, Pichai described the present AI momentum as an “extraordinary moment” but one marked by “elements of irrationality,” echoing warnings made during the 1990s dotcom bubble.
The surge in AI excitement has driven record valuations and investment across the tech industry. Alphabet’s stock has surged nearly 46% this year, buoyed by investor confidence in Google’s ability to compete with OpenAI’s ChatGPT and other emerging rivals. However, Pichai cautioned that if the bubble bursts, its impact would ripple across the entire sector. “I think no company is going to be immune, including us,” he said, adding that while Google could “weather the storm,” a sharp correction would affect the broader industry.
Concerns over overheated AI valuations have already unsettled investors and regulators. In the US and the UK, policymakers have warned of growing bubble risks. Despite this, Pichai believes the boom, though frothy in parts, reflects real technological progress. Alphabet is aggressively expanding its AI investments, including a £5 billion commitment in the UK to strengthen AI infrastructure and research, build a new data centre, and expand DeepMind. The company also plans to begin training AI models in Britain, supporting the UK’s ambition to become a leading AI “superpower.” But he acknowledged that AI’s “immense” energy demands could delay Alphabet’s net-zero targets.
Pichai’s concerns echo those of other tech leaders. OpenAI CEO Sam Altman warned that investor excitement around AI is excessive, saying “someone is going to lose a phenomenal amount of money.” Amazon founder Jeff Bezos shared similar views, noting that while industrial bubbles may not be as harmful as financial ones, market corrections are inevitable.
As tech giants race ahead in AI innovation, industry leaders agree on one point — the current euphoria won’t last forever, and when the hype deflates, the impact will be felt across the entire sector.