The advance of artificial intelligence continues to attract record investments and overwhelming expectations, but not everyone in Silicon Valley considers the current pace to be sustainable. In an interview given to the BBCthe CEO of Alphabet and Google, Sundar Pichaiwarned that the sector shows clear signs of ‘irrationality’ and that, if a bubble finally bursts, ‘No company will be immune, including us’.
His words come at a time when Alphabet’s market capitalization has doubled its value in 7 months and reached 3.3 billion eurosdriven by optimism around its AI models and the specific chips to run them.
Repeat the dotcom bubble of the year 2000
Pichai recognized that the growth of investment in AI is experiencing a ‘extraordinary moment’but he recalled that the recent history of the technology industry is full of cycles of euphoria that end up correcting themselves. He alluded directly to the rise of the Internet in the late 90swhen the valuations of the first companies on the Internet skyrocketed before collapsing in 2000, causing bankruptcies and widespread layoffs.
‘We can look back at the Internet now. Clearly There was a lot of overinvestment, but none of us would question whether the Internet was a game-changer.. I hope it’s the same with AI. So I think it is something rational and, at the same time, there are elements of irrationality in a moment like this‘, Pichai assured.
Unprecedented investments
The current context is marked by unprecedented investment commitments. Some of the main companies in the sector have announced multimillion-dollar plans to expand its infrastructureincluding data centers, specialized networks and proprietary hardware.
OpenAIFor example, it plans to allocate 1.3 billion euros infrastructure over the next eight years, against expected revenues of 12.2 billion euros this exercise. For many analysts, these figures reflect excessive confidence in the ability of generative models to continue scaling without technical or economic limitations.
In this scenario, Alphabet has experienced a strong boost in the stock market thanks, in large part, to the perception that it can compete on equal terms with OpenAI and that its AI chips are a real alternative to Nvidia’s dominance. The company of Jensen Huang recently achieved an unprecedented valuation of 4.7 billion eurosbenefited by the demand for GPUs required by current AI systems.
Google’s structural advantage
Even so, Pichai maintains that Google has a structural advantage to withstand any future turbulence. The company, he claims, controls a ‘full stack’ of technologies which includes everything from internally designed processors to YouTube data, including proprietary models and a long history of advanced scientific research. This integrated approach, in his opinion, would allow him better absorb a readjustment if a market correction occurs.
Don’t trust AI too much
The manager also insisted that users must maintain a critical attitude towards the responses generated by AI tools. Google and other AI companies are regularly questioned about the accuracy of their models and Pichai emphasizes that these tools are very useful in creative or exploratory tasks, but should not be taken as completely reliable sources. The people ‘you have to learn to use these tools for what they are good for and not blindly trust everything they say’he noted, warning against blind confidence in its results.
Another relevant point of the interview was the energy impact of AI expansion. Pichai admitted that growing consumption is delaying meeting Alphabet’s climate goalsalthough it reiterated its intention to achieve carbon neutrality by 2030 through investments in new energy technologies. Even so, he warned that limiting the availability of energy in an increasingly digitalized economy ‘will have consequences’.
Despite the warnings, Pichai reaffirmed his conviction that AI is ‘the deepest technology’ developed by humanity. Recognize that it will bring social disruptionsbut also new professional opportunities. For the CEO of Google, Those who learn to integrate it into their work will be those best positioned in the next technological stage.