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Google CEO warns of AI bubble risks in exclusive BBC interview
Alphabet CEO Sundar Pichai cautioned that no company-including Google-would escape unscathed if the artificial intelligence investment bubble were to burst, he told the BBC in an exclusive interview at the tech giant's California headquarters.
While acknowledging the current AI boom as an "extraordinary moment," Pichai described elements of "irrationality" in the market, drawing parallels to the dotcom bubble of the late 1990s. His remarks come amid soaring valuations of AI-focused firms and a surge in corporate spending on the technology, raising concerns about a potential market correction.
Market volatility and Alphabet's resilience
Alphabet's market value has doubled to $3.5 trillion in seven months, fueled by investor confidence in its ability to compete with rivals like OpenAI, the creator of ChatGPT. However, Pichai emphasized that even Google would face challenges if the AI sector experienced a downturn.
"I think no company is going to be immune, including us," he stated, while noting that Google's vertically integrated model-spanning AI chips, data infrastructure, and research-positions it to weather potential turbulence better than competitors reliant on third-party solutions.
"We can look back at the internet right now. There was clearly a lot of excess investment, but none of us would question whether the internet was profound. I expect AI to be the same."
Sundar Pichai, CEO of Alphabet
Energy demands and climate trade-offs
Pichai highlighted the "immense" energy requirements of AI, which accounted for 1.5% of global electricity consumption in 2024, according to the International Energy Agency. He warned that insufficient energy infrastructure could constrain economic growth, urging investments in new power sources.
The CEO acknowledged that AI's energy intensity has slowed progress toward Alphabet's climate goals but reaffirmed the company's commitment to achieving net-zero emissions by 2030 through technological innovation. "The rate at which we were hoping to make progress will be impacted," he admitted.
UK investment and AI's societal impact
Alphabet is expanding its UK presence with a £5 billion investment over two years, focusing on AI research at its London-based DeepMind unit. Pichai revealed plans to eventually train AI models in the UK, aligning with government efforts to position the country as a global AI leader behind the U.S. and China.
Addressing AI's broader implications, Pichai called it "the most profound technology" humanity has developed, predicting both job disruptions and new opportunities. "People who adapt to AI will do better," he said, emphasizing the need for professionals-from teachers to doctors-to integrate AI tools into their work.
Industry skepticism and historical parallels
Pichai's comments echo recent warnings from figures like JP Morgan CEO Jamie Dimon, who noted that while AI investments will yield returns, some capital may be lost. Analysts have also questioned the sustainability of OpenAI's $1.4 trillion in deals, given its projected revenues remain a fraction of that sum.
The interview underscores growing scrutiny of the AI market, where valuations-such as Nvidia's record $5 trillion milestone-have sparked debates about long-term viability versus short-term speculation.
