The AI bubble could burst, and no company would be completely safe, according to Google CEO Sundar Pichai

AI progress feels unstoppable. Most people hate seeing human creativity replaced by artificial intelligence, yet we get another Coca-Cola Christmas ad that’s clearly AI-generated. Meanwhile, we hear that Gen Z doesn’t really mind all the “AI slop.” It feels like there are just two extremes: on one side, you have companies like Krafton going all-in on AI, and on the other, studios like AdHoc saying that no AI is able to replace real voice actors, after their first game, Dispatch, was a big hit. But what we don’t think about is how much tech companies are pouring into AI systems, and how little they’re actually earning from it so far. At this point, it’s just another bubble waiting to burst.

Google’s CEO warns that AI could face a bubble burst

In an exclusive interview with BBC News, Alphabet and Google CEO Sundar Pichai called the current surge in AI investments “extraordinary,” but warned there’s some “irrationality” in the hype. He said if an AI bubble bursts, no company – including Google – would be completely safe, though Google is in a relatively strong position thanks to its “full stack” of tech, from AI chips to YouTube data to its research teams. He compared the situation to the Internet boom of the late 1990s, where valuations skyrocketed before collapsing, causing bankruptcies and job losses.

Over the past year, some analysts and tech critics have grown skeptical about the $1.4 trillion in deals tied to Google rival OpenAI. The company plans to spend that huge sum on infrastructure over the next eight years, even though it expects to bring in only about $13 billion in revenue this year.

Pichai also cautioned against blindly trusting AI, noting that these tools are prone to errors. He said AI works best when paired with other information sources rather than relied on as the sole authority. Recent studies back this up, showing that AI models will sometimes invent answers instead of admitting they don’t know, much like students guessing on exam questions, and in some cases, researchers have found AI systems can even act unpredictably to protect themselves.

He admitted that scaling AI consumes massive amounts of energy, which has slowed Alphabet’s climate goals, and called for investments in new energy technologies to support AI growth without derailing net-zero targets.

Despite the challenges, Pichai called AI “the most profound technology” humans have worked on. He predicted it will reshape jobs, some will disappear, others will evolve, and said people who learn to use AI effectively “will do better” in their careers.

• Google
• tech
• AI / Artificial Intelligence