Google CEO sees dot-com bubble parallels: 'I expect AI to be the same'

The breakneck pace of investment in companies developing AI tech over the past few years has many onlookers convinced we’re currently in an AI bubble. Sundar Pichai knows the situation is serious: when the AI bubble bursts, “no company is going to be immune,” the Google CEO told the BBC.

In an interview with the BBC at Google’s headquarters in California, Pichai drew parallels between today’s AI market and the 1990s dot-com boom, during which investment in internet startups reached a fever pitch before a crash saw tech firms lose trillions in market cap and shed tens of thousands of jobs. Back then, “There was clearly a lot of excess investment,” Pichai said, “but none of us would question whether the internet was profound.” Pichai said AI investment is in a similar spot today.

“I expect AI to be the same,” Pichai told the BBC, gesturing to the technology’s potential to remain relevant after this initial boom subsides. “So I think it’s both rational and there are elements of irrationality through a moment like this.” BBC notes that Google parent Alphabet’s stock price has doubled this year amid the AI boom; the company currently has a market capitalization of about $3.5 trillion.

The AI market has seen frenzied investment activity in recent months. In October, Bloomberg reported on a complex network of deals involving OpenAI and other AI firms that analysts are concerned may be “artificially propping up the trillion-dollar AI boom.” Google continues to invest heavily in AI infrastructure: This week, the company announced a $40 billion investment to build out data centers in Texas.