Google CEO Sundar Pichai warns of AI spending irrationality | Latest Tech News
Google boss Sundar Pichai admitted that he sees some “irrationality” driving the artificial intelligence growth – and warned that “no company” would emerge unscathed if the bubble bursts.
Pichai – whose company has teed up $93 billion in capital expenditures this yr alone as it boosts development of the fledgling technology – flagged the risk to markets amid a raging debate on Wall Street about whether or not AI firms are overvalued.
“Given the potential of this technology, the excitement is very rational,” Pichai told the BBC in an interview revealed Tuesday. “It’s also true, when we go through these investment cycles, there are moments we overshoot collectively as an industry.”
Google CEO Sundar Pichai continues to tout AI’s potential to rework the economic system. REUTERS
The Google CEO drew some parallels between current market circumstances around AI investment and the web growth in which valuations of early tech firms soared until the so-called “dot-com bubble” burst in 2000.
“We can look back at the internet right now. There was clearly a lot of excess investment, but none of us would question whether the internet was profound,” Pichai said. “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.”
When requested how Google might deal with the potential bursting of the AI bubble, Pichai said the company was ready but admitted, “no company is going to be immune, including us.”
Pichai also spoke glowingly about AI’s potential to reshape the economic system for the better – even as he acknowledged it was possible to trigger labor upheaval including job losses as companies undertake AI technology.
Tech shares have been particularly unstable during a current downturn in US markets.
The tech-heavy Nasdaq composite was trading about 1% decrease on Tuesday, while the Dow Jones Industry Average was on tempo for its fourth-straight shedding session while shedding about 300 factors, or roughly 0.7%.
So far, Google has remained resilient, with shares surging about 50% since the start of the yr.
Signs of panic emerged this week following revelations that billionaire tech investor Peter Thiel had dumped his whole stake in key chip maker Nvidia.
Google is spending more than $90 billion this yr alone as it ramps up AI development. Getty Images
That got here just days after Japanese investment giant Softbank offered off all of its Nvidia holdings.
Nvidia’s stock is seen as key bellwether because other tech giants rely closely on its superior AI pc chips to energy their fashions.
Nvidia shares have fallen more than 9% since the start of the month.
Investors might be watching intently when the company studies third-quarter earnings on Wednesday.
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