Google CEO warns: When the AI bubble bursts, no company will be spared.

Alphabet CEO Sundar Pichai has issued a rare warning: there is an "irrational" element in the current artificial intelligence boom, and once the potential bubble bursts, no company will be spared—even Google is no exception.

In a recent exclusive media interview, Pichai admitted that the growth in AI investment marks an "extraordinary moment," but also frankly stated that there are "irrational" factors driving the current prosperity. This statement comes as concerns about an AI bubble are mounting both inside and outside Silicon Valley. In recent months, valuations of AI tech companies have soared, and investments in the sector have reached staggering levels.

When asked whether Google could avoid impact if the AI bubble bursts, Pichai said the tech giant has the capacity to weather the potential storm, but also warned: "I don't think any company will be spared, including us."

In this wide-ranging interview, Pichai also discussed the enormous energy demands of AI, the company's delay in climate goals, and the profound impact this technological revolution may have on jobs, painting a complex picture full of both opportunities and serious challenges.

"Irrational" moments in the AI boom

The market's frenzy for AI has evoked memories of the dot-com bubble in the late 1990s. Back then, optimism about new technology sent the valuations of early internet companies soaring, but the bubble eventually burst in early 2000, leading to a wave of bankruptcies, stock crashes, and hits to individual savings and pension funds. Analysts are skeptical about the roughly $1.4 trillion worth of complex deals surrounding OpenAI, while the company’s expected revenue this year is less than one-thousandth of the planned investment.

Pichai’s comments about "irrationality" echo former Federal Reserve Chairman Alan Greenspan’s famous warning of "irrational exuberance" before the internet bubble burst in 1996. Pichai said, during such investment cycles, the industry can be subject to "overinvestment." But he also believes, "We can look back at the internet. Obviously, there was a lot of overinvestment then, but none of us would question the profound significance of the internet. I expect AI will be similar."

Pichai’s views also have support from Wall Street. JPMorgan Chase CEO Jamie Dimon stated last month that investments in AI will ultimately pay off, but some of the capital going into the sector "may be wasted."

Although Pichai warns that "no company will be spared" he said, Google possesses a unique "full-stack" technology model, which gives it confidence to withstand the storm.

This model covers the complete technology chain from chips to data to models and cutting-edge science. Specifically, Alphabet is developing AI-specialized superchips to compete with NVIDIA; at the same time, its platforms such as YouTube provide vast data resources.

AI is humanity's "most profound technology" yet

Pichai called AI the "most profound technology" studied by humans so far, and predicted it will reshape the way we work as we know it. "We will have to go through disruptive social change," he said, but this will also "create new opportunities."

He believes AI will "evolve and transform certain jobs, and people will need to adapt." Those who learn to adapt to AI "will fare better." He emphasized:

"Whether you want to be a teacher or a doctor, all these professions will continue to exist, but those who excel in them will be those who learn how to use these new tools."

Meanwhile, Alphabet is also increasing strategic investment in key markets. The company has pledged to invest £5 billion in the UK over the next two years for infrastructure and research. Pichai said Alphabet will carry out "state-of-the-art" research in Britain, with its key AI subsidiary DeepMind headquartered in London. He also disclosed for the first time that Google will "over time" "train our models" in the UK—a move seen by the UK government as a key step in solidifying the country's position as the world's third-largest AI "superpower" after the United States and China.

The rapid development of AI is not without costs; its huge energy demand is becoming an increasingly acute challenge. Pichai warned that AI’s energy consumption is "enormous" and said action is needed—in the UK included—to develop new energy sources and expand the scale of energy infrastructure. "You don’t want to constrain economic development because of energy issues; I think that would have consequences," he said.

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