Source: Sharecast
Alphabet boss Sundar Pichai said while the growth of AI investment had been an "extraordinary moment", there was some "irrationality" in the current boom in the sector.
Stock markets have been retreating amid global fears over valuations of AI tech. Asked in an interview with the BBC whether Google would be immune to the impact of the AI bubble bursting, Pichai said the tech giant could weather that potential storm but also issued a warning.
"I think no company is going to be immune, including us," he said.
"We can look back at the internet right now," referring to the dotcom crash of 2000. "There was clearly a lot of excess investment, but none of us would question whether the internet was profound."
"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's remarks echoed those of Klarna boss Sebastian Siemiatkowski who warned against the tech industry’s multibillion-dollar dash to build data centres to power AI models.
Siemiatkowski holds shares in companies including OpenAI, Perplexity, xAI and Cerebras through his family office Flat Capital. He told the Financial Times that the huge sums being poured into computing infrastructure made him “nervous”.
“I think [OpenAI] can be very successful as a company but at the same time I’m very nervous about the size of these investments in these data centres,” he said. “That’s the particular thing that I am concerned about.”
The sector is borrowing hundreds of billions to fund its expansion in AI. OpenAI - which is lossmaking - has made total commitments worth $1.5trn on securing access to computing resources.
Siemiatkowski pointed to the popularity of ChatGPT as evidence of the widespread adoption of AI services. “[But] that’s a different thing than asking myself ‘is it worth putting a $1tn worth into servers’,” he added. “I am concerned that piling that kind of money into data centres may turn out to be not worth it,” he told the newspaper.
Reporting by Frank Prenesti for Sharecast.com