The head of Google's parent firm Alphabet, Sundar Pichai, has cautioned the BBC that every company would be impacted if the AI bubble were to burst. Speaking exclusively to BBC News, Pichai acknowledged that while AI investment growth is an "extraordinary moment," there is some "irrationality" in the current boom. Amid fears in Silicon Valley of soaring valuations, Pichai warned, "I think no company is going to be immune, including us."
His wide-ranging interview at Google's California headquarters, reported by the BBC, touched on energy needs, climate targets, UK investment, and AI's effect on jobs, coming as market scrutiny intensifies. Alphabet's shares have doubled in seven months to $3.5 trillion as market confidence in its ability to counter OpenAI grows. A specific focus remains on Alphabet's competition with Nvidia, run by Jensen Huang, which recently hit a $5 trillion valuation, even as analysts question the $1.4 trillion in deals surrounding OpenAI.
Pichai's remarks about "irrationality" echoed Alan Greenspan's 1996 "irrational exuberance" warning during the dotcom boom. Pichai told the BBC the industry can "overshoot" in such cycles. "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," he said. "I expect AI to be the same. So I think it's both rational and there are elements of irrationality through a moment like this." His comments follow a similar warning from JP Morgan's Jamie Dimon, who told the BBC some AI investments would "probably be lost." Pichai argued Google's "full stack" model provides a better position to handle turbulence.
The BBC noted the tech giant is also expanding its UK footprint, having announced a £5 billion investment in UK AI infrastructure and research in September. Pichai confirmed Alphabet will develop "state-of-the-art" research via its London-based DeepMind unit. He stated for the first time that Google would "over time" "train our models" in the UK, a move ministers believe will secure the UK as an AI "superpower" after the US and China. "We are committed to investing in the UK in a pretty significant way," Pichai said.
However, the Alphabet chief also highlighted the "immense" energy requirements of AI, which the International Energy Agency stated consumed 1.5% of global electricity last year. Pichai, according to the BBC, said action is needed, including in the UK, to scale up energy infrastructure. "You don't want to constrain an economy based on energy, and I think that will have consequences," he warned. He conceded these intensive energy needs mean slippage on the company's 2030 net-zero climate target, stating, "The rate at which we were hoping to make progress will be impacted."
AI's impact on employment will be significant, Pichai told the BBC, labeling it "the most profound technology" humanity has ever addressed. "We will have to work through societal disruptions," he stated, noting it will simultaneously "create new opportunities." He explained, "It will evolve and transition certain jobs, and people will need to adapt," emphasizing that those who adjust to AI "will do better," adding, "It doesn't matter whether you want to be a teacher [or] a doctor. All those professions will be around, but the people who will do well in each of those professions are people who learn how to use these tools."
