No company is “immune” if AI bubble bursts amid soaring valuations

• Warns that Alphabet’s net-zero environmental targets would face delays as Google scales up its computing resources to sustain AI growth.

Alphabet Chief Executive Sundar Pichai cautioned that no company—including Google—would be “immune” if the artificial intelligence (AI) investment boom collapses, as market exuberance pushes sector valuations to dizzying heights and stirs fears of a potential bubble.

In an interview with the BBC published on Tuesday, Pichai described the ongoing AI investment wave as an “extraordinary moment” but acknowledged “elements of irrationality” reminiscent of the 1990s tech bubble. “I think no company is going to be immune, including us,” Pichai said, when pressed on how Google might weather an industry downturn.

Analysts have increasingly debated whether current AI valuations are sustainable, and Pichai’s comments add momentum to a growing chorus warning of “irrational exuberance” in the sector.

Global ambitions

Alphabet shares have soared approximately 46 per cent year-to-date, reflecting investor confidence in Google’s ability to remain competitive alongside leaders like OpenAI—the maker of ChatGPT. Meanwhile, US market concerns over lofty valuations are beginning to ripple across broader indices, and British policymakers have also warned of emerging bubble risks.

In September, Alphabet announced a commitment of £5 billion over two years for UK AI infrastructure and research, including a new data centre and continued investment in DeepMind, its London-based artificial intelligence lab.

Pichai said Google will begin training AI models within the UK, a move welcomed by Prime Minister Keir Starmer as bolstering Britain’s ambition to become the world’s third AI “superpower,” trailing only the US and China.

Pichai also flagged the “immense” energy requirements tied to AI model training, warning that Alphabet’s net-zero environmental targets would face delays as Google scales up its computing resources to sustain AI growth.

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