Sundar Pichai, CEO of Alphabet Inc., has issued a strong warning about the current surge in artificial intelligence investment. While acknowledging the transformative potential of AI, he cautioned that the market is showing clear signs of excess and warned that no company, “including us,” would escape the fallout if the AI bubble were to burst. He was talking to BBC expressing his concern for AI and the Big Tech.
He compared the current moment to the early days of the internet, noting that although the dot-com era was marked by unsustainable investment, the underlying technology ultimately proved profound. Pichai said he expects AI to follow a similar trajectory, where genuine innovation exists alongside irrational exuberance.
“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,” Pichai 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.”
Pichai described the present AI boom as “extraordinary,” but he emphasized that some of the enthusiasm resembles the speculative rush of the dot-com years.
He pointed to the risks of inflated valuations and heavy overcommitment to AI chips, infrastructure and model development. Analysts have reinforced this concern, noting that valuations for AI-focused companies have climbed into the trillions even as actual revenue and practical returns struggle to keep pace.
Alphabet itself has benefited from the frenzy, with its stock rising roughly 46 percent this year as investors bet heavily on its AI expansion.
Despite the broader concerns, Pichai expressed confidence in Alphabet’s long-term strategy. The company continues to invest billions into AI infrastructure, including massive new data centers and expanded model training operations in regions such as the United Kingdom.
He also acknowledged, however, that the enormous energy requirements of large-scale AI computation are delaying climate commitments and increasing pressure on electricity resources. When asked whether Google could withstand a potential burst of the AI bubble, Pichai reiterated that no company is insulated from such a shock, including his own.
Pichai’s remarks carry significant implications for the technology industry. His warning suggests that even major players with deep resources are vulnerable if investment in AI outstrips practical returns. Many organizations that have rapidly pushed AI into their operations may soon need to reassess timelines, budgets and measurable results.
As compute demands skyrocket, regulators and policymakers are raising concerns about sustainability, ethical usage and energy consumption. Observers note that the competitive atmosphere in Silicon Valley is intensifying as valuations rise, increasing the urgency for companies to distinguish genuine long-term value from hype-driven expansion.
The interview covered long-standing concerns surrounding AI, including energy needs, reducing climate targets, accuracy and the impact of AI on jobs.
You can watch it here: