Google boss Sundar Pichai admitted that he sees some “irrationality” driving the synthetic intelligence boom – and warned that “no company” would emerge unscathed if the bubble bursts.
Pichai – whose company has teed up $93 billion in capital expenditures this 12 months alone because it boosts development of the fledgling technology – flagged the danger to markets amid a raging debate on Wall Street about whether AI firms are overvalued.
“Given the potential of this technology, the thrill could be very rational,” Pichai told the BBC in an interview published Tuesday. “It’s also true, once we undergo these investment cycles, there are moments we overshoot collectively as an industry.”
The Google CEO drew some parallels between current market conditions around AI investment and the web boom wherein valuations of early tech firms soared until the so-called “dot-com bubble” burst in 2000.
“We will look back at the web right away. There was clearly loads of excess investment, but none of us would query whether the web was profound,” Pichai said. “I expect AI to be the identical. So, I feel it’s each rational and there are elements of irrationality through a moment like this.”
When asked how Google could handle the potential bursting of the AI bubble, Pichai said the corporate was prepared but admitted, “no company goes to be immune, including us.”
Pichai also spoke glowingly about AI’s potential to reshape the economy for the higher – at the same time as he acknowledged it was prone to cause labor upheaval including job losses as businesses adopt AI technology.
Tech stocks have been especially volatile during a recent downturn in US markets.
The tech-heavy Nasdaq composite was trading about 1% lower on Tuesday, while the Dow Jones Industry Average was on pace for its fourth-straight losing session while shedding about 300 points, or roughly 0.7%.
Thus far, Google has remained resilient, with shares surging about 50% for the reason that start of the 12 months.
Signs of panic emerged this week following revelations that billionaire tech investor Peter Thiel had dumped his entire stake in key chip maker Nvidia.
That got here just days after Japanese investment giant Softbank sold off all of its Nvidia holdings.
Nvidia’s stock is seen as key bellwether because other tech giants rely heavily on its advanced AI computer chips to power their models.
Nvidia shares have fallen greater than 9% for the reason that start of the month.
Investors shall be watching closely when the corporate reports third-quarter earnings on Wednesday.
