Google boss Sundar Pichai warns ‘no company immune’ if AI bubble bursts

The head of Google’s parent company Alphabet told the BBC that if the AI ​​bubble bursts every company would be affected.

Speaking exclusively to BBC News, Sundar Pichai said that although the growth in artificial intelligence (AI) investment was an “extraordinary moment”, there was some “irrationality” in the current AI boom.

This is going beyond a bubble, amid fears in Silicon Valley and as the value of AI tech companies has soared in recent months and companies are spending heavily on the emerging sector.

Asked whether Google would be immune to the impact of the bursting of the AI ​​bubble, Mr Pichai said the tech giant could weather this potential storm, but also offered a warning.

“I think no company, including us, will be immune from this situation,” he said.

In a wide-ranging exclusive interview at Google’s headquarters in California, he also discussed energy needs, slowing down climate targets, investments in the UK, Accuracy of AI modelsand the impact of the AI ​​revolution on jobs.

The interview comes at a time when scrutiny on the state of the AI ​​market has never been more intense.

The value of Alphabet shares has doubled in seven months to $3.5 trillion (£2.7 trillion) as markets grow more confident in the search giant’s ability to fend off the threat from ChatGPT owner OpenAI.

A particular focus for Alphabet is its development of specialized superchips for artificial intelligence, competing with Nvidia, led by Jensen Huang, who recently reached a world-first $5 trillion valuation.

As valuations rise, some analysts have expressed skepticism that a complex $1.4 trillion web of deals is being made around OpenAI, which is expected to generate less than one-thousandth of its planned investment this year.

In comments reminiscent of those made by U.S. Federal Reserve chairman Alan Greenspan in 1996, he warned of “irrational exuberance” in the market during the dotcom boom and well before the market crash in 2000.

Values ​​of early internet companies soared in the late 1990s amid a wave of optimism about the then-new technology. However, when the dotcom bubble burst, share prices collapsed and many companies went bankrupt, leading to job losses.

Mr Pichai said the sector could “overdo it” in investment cycles like this.

“We can look back at the internet right now. There was obviously a lot of investment, but none of us are going to question whether the internet is deep or not,” he said.

“I expect AI to be the same. So I think it’s both rational and there are elements of irrationality at a moment like this.”

The comments follow a warning from Jamie Dimon, the boss of US bank JP Morgan, who told the BBC last month that investment in artificial intelligence would pay off but some of the money was flowing into the industry. “probably disappear”.

But Mr. Pichai said Google’s unique model of owning its own “entire technology stack,” from chips to YouTube data to models and leading-edge science, meant it was better positioned to weather any turbulence in the AI ​​market.

The tech giant is also expanding its footprint in the UK. In September, Alphabet announced that Investing in UK AIWe will allocate £5bn to infrastructure and research over the next two years.

Mr Pichai said Alphabet would develop “cutting-edge” research efforts in the UK, including at its key London-based AI unit DeepMind.

For the first time, he said Google would take a government-forced step “in time” to “train our models” in the UK; cabinet ministers believe it will make the UK the third AI “superpower” after the US and China.

“We are committed to making a very significant investment in the UK,” Mr Pichai said.

But he also warned of AI’s “enormous” energy needs. 1.5% of world electricity consumption last yearAccording to the International Energy Agency.

Mr Pichai said action was needed, including in the UK, to develop new energy sources and grow energy infrastructure.

“You don’t want to constrain an energy-based economy, and I think there will be consequences,” he said.

He also acknowledged that the intense energy needs of the expanding AI initiative mean a shift in the company’s climate goals, but emphasized that Alphabet is insisting on its goal of reaching net zero by 2030 by investing in new energy technologies.

“The rate at which we expect to make progress will be affected,” he said.

Mr Pichai said artificial intelligence will also impact work as we know it, describing it as the “deepest technology” humanity has worked on.

“We will have to work on societal disruptions,” he said, adding that this would “create new opportunities.”

“Certain jobs will evolve and transition, and people will have to adapt,” he said. Those who adapt to AI will “do better.”

“It doesn’t matter whether you want to be a teacher or not [or] a doctor “All of these professions will be around, but the people who will be successful in each of these professions are the people who learn how to use these tools.”