Google boss says trillion-dollar AI investment boom has ‘elements of irrationality’

Every company would be affected if the AI ​​bubble burst, boss GoogleParent company Alphabet told the BBC, Nevs.az conveys calling BBC.

Speaking exclusively to BBC News, Sundar Pichai said the surge in investment in artificial intelligence (AI) was an “extraordinary moment”, that there was a certain “irrationality” in the current AI boom.

It comes amid fears of a bubble in Silicon Valley and beyond, as the value of AI tech companies has soared in recent months and companies are spending heavily on the growing industry.

Asked whether Google would be immune to the impact of the AI ​​bubble bursting, Mr Pichai said the tech giant could weather that potential storm, but also issued a warning.

“I don’t think any company will be immune, including us,” he said.

In a wide-ranging exclusive interview at Google’s headquarters in California, he also addressed energy needs, slowing climate targets, UK investment, the accuracy of its AI models and the effect of the AI ​​revolution on jobs.

The interview comes as scrutiny of the state of the artificial intelligence market has never been more intense.

Alphabet shares have doubled in value in seven months to $3.5tn (£2.7tn) as markets grew more confident in the search giant’s ability to fend off the OpenAI threat from ChatGPT owner.

A particular focus is Alphabet’s development of specialized artificial intelligence superchips that compete with Nvidia, led by Jensen Huang, which recently reached its first global valuation of $5 billion.

As valuations rise, some analysts have expressed skepticism about the complicated web of $1.4 trillion deals being made around OpenAI, which is expected to bring in less than a thousandth of its projected investment this year.

That has fueled fears that the stock market is headed for a repeat of the dotcom boom and bust of the late 1990s. This sent early Internet companies soaring amid a wave of optimism for what was then a new technology, before the bubble burst in the early 2000s and many share prices collapsed.

This led to the collapse of some companies, resulting in job losses. Falling share prices can also affect the value of people’s savings, including their pension funds.

In comments echoing those made by US Federal Reserve Chairman Alan Greenspan in 1996, warning of “irrational exuberance” in the market long before the dotcom crash, Mr Pichai said the industry can “jump” in investment cycles like this one.

“Now we can look back at the Internet. Obviously there was a lot of excess investment, but none of us would have asked if the Internet was deep,” he said.

“I expect artificial intelligence to be the same. So I think it’s both rational and there are elements of irrationality through a moment like this.”

His comments followed warnings from Jamie Dimon, the head of US bank JP Morgan, who told the BBC last month that investment in artificial intelligence would pay off, but that some of the money pouring into the industry was “probably going to be lost”.

But Mr Pichai said Google’s unique model of owning its own “full range” of technologies – from chips to YouTube data to models and frontier science – meant it was better placed to ride out any turbulence in the AI ​​market.

The tech giant is also expanding its footprint in the UK. In September, Alphabet announced it was investing in artificial intelligence in the UK, committing £5bn to infrastructure and research over the next two years.

Mr Pichai said Alphabet would develop “cutting-edge” research work in the UK, including key AI unit DeepMind, based in London.

He said for the first time that Google would “over time” take the government-pushed step to “train our models” in the UK – a move ministers believe will cement the UK as the number three AI “superpower” after the US and China.

“We are committed to investing in the UK in a fairly significant way,” Mr Pichai said.

However, he also warned of the “enormous” energy needs of artificial intelligence, which accounted for 1.5 percent of global electricity consumption last year, according to the International Energy Agency.

Mr Pichai said action was needed, including from the UK, to develop new energy sources and increase energy infrastructure.

“You don’t want to restrict an energy-based economy, and I think that will have consequences,” he said.

He also acknowledged that the intensive energy needs of his expanded AI venture meant there had been a slippage in the company’s climate goals, but insisted that Alphabet still aims to reach net zero by 2030 by investing in new energy technologies.

“It will affect the speed at which we had hoped to make progress,” he said.

AI will also impact work as we know it, Mr. Pichai said, calling it the “most profound technology” humanity has ever worked on.

“We will have to work on social disruption,” he said, adding that it would also “create new opportunities.”

“It’s going to evolve and change certain businesses, and people are going to have to adapt,” he said. Those who adapt to AI “will fare better.”

“It doesn’t matter if you want to be a teacher (or) a doctor. All those professions will be there, but the people who will do well in each of those professions are the people who learn to use these tools.”

Nevs.Az