Alphabet CEO Sundar Pichai compared the current surge in AI spending to the dot-com boom, acknowledging “elements of irrationality” in soaring valuations like Nvidia’s $5tn and OpenAI’s $1.4tn in deals, though Google’s “full stack” model provides a buffer.
In a stark assessment of the red-hot artificial intelligence (AI) market, Sundar Pichai, CEO of Google parent company Alphabet, told the BBC that the industry displays “elements of irrationality” and warned that “no company is going to be immune” if the AI investment bubble bursts.
Pichai’s comments echo the infamous “irrational exuberance” warning issued ahead of the 2000 dot-com crash. He drew a direct comparison to that era, noting that while the internet saw “a lot of excess investment,” its underlying value was profound.
Valuations Outpace Revenue
The warning comes as the value of AI tech companies has soared. Alphabet shares have doubled in seven months to $3.5 trillion as the company’s chip development (TPU/Trillium) intensifies competition with Nvidia, which recently hit a world-first $5 trillion valuation.
Skepticism remains high: analysts point to a complex web of $1.4 trillion in deals surrounding OpenAI, a firm expected to generate less than one-thousandth of that planned investment this year.
However, Pichai expressed confidence in Alphabet’s ability to “weather that potential storm” due to its “full stack” model—controlling everything from specialized superchips (TPUs) and data infrastructure to final AI models and frontier research (DeepMind).
UK Investment and Geopolitics
Addressing geopolitical concerns, Pichai affirmed Alphabet’s commitment to the UK, announcing a £5 billion investment in infrastructure and research over the next two years, including its London-based DeepMind unit.
He also confirmed that Google will “over time” begin to “train our models” in the UK, a move that UK cabinet ministers believe will cement the nation as the third AI “superpower” after the US and China.
