In an interview with the BBC published Tuesday, Pichai described the current wave of AI investment as an “extraordinary moment” but acknowledged “elements of irrationality” reminiscent of the dotcom bubble. Analysts have increasingly debated whether AI valuations—driven by intense investor interest—are sustainable in the long term.
When asked how Google would fare in the event of a market correction, Pichai said the company could withstand a downturn but conceded, “I think no company is going to be immune, including us.” Alphabet’s shares have climbed roughly 46% this year, reflecting investor confidence in the company’s ability to compete with OpenAI, the creator of ChatGPT.
The surge in AI valuations is also beginning to affect broader markets in the United States, while UK policymakers have voiced concerns about bubble risks. In a major push to cement its AI leadership, Alphabet announced in September that it would invest £5 billion over two years in UK AI infrastructure and research, including a new data center and expanded support for DeepMind, its London-based AI lab.
Pichai said Google would begin training AI models in the UK, a move Prime Minister Keir Starmer hopes will strengthen Britain’s ambition to become the world’s third AI “superpower,” after the US and China.
The CEO also highlighted the environmental impact of scaling AI, noting the “immense” energy demands of training large models. As a result, Alphabet’s net-zero emissions targets will be delayed while the company expands its computing capacity.