Alphabet Chief Executive Sundar Pichai said no company would be unscathed if the artificial intelligence boom collapses, as soaring valuations and heavy investment in the sector fuel concerns of a bubble.
Mr. Pichai said in an interview with the BBC published on Tuesday (November 18, 2025) that the current wave of AI investment was an “extraordinary moment” but acknowledged “elements of irrationality” in the market, echoing warnings of “irrational exuberance” during the dotcom era.
There has also been much debate among analysts about whether AI valuations are sustainable.
Asked about how Google would cope with a potential bursting of a bubble, Mr. Pichai said he thought it could weather the storm but added: “I think no company is going to be immune, including us.”
Alphabet shares have surged about 46% this year, as investors bet on its ability to compete with ChatGPT-maker OpenAI.
In the United States, concerns about lofty AI valuations have begun to weigh on broader markets, while British policymakers have also flagged bubble risks.
In September, Alphabet pledged 5 billion pounds over two years for UK AI infrastructure and research, including a new data centre and investment in DeepMind, its London-based AI lab.
Mr. Pichai also told the BBC in the interview conducted at Google’s California headquarters that Google would begin training models in Britain, a move Prime Minister Keir Starmer hopes will bolster the country’s ambition to be the world’s third AI “superpower” after the United States and China.
Mr. Pichai also warned of the “immense” energy needs of AI and said Alphabet’s net-zero targets would be delayed as it scales up computing power.
Opinions split over AI bubble
Here is a list of industry executives, economists, investors and analysts’ takes on the topic:
Morten Wierod, CEO OF ABB: “I don’t think there is a bubble, but we do see some constraints in terms of construction capacity not keeping up with all the new investments,” Wierod told Reuters on October 16.
“We are talking about trillions in investment,” he said. “That will take a few years to implement because there is not enough people and resources to build all this.”
Jeff Bezos, FOUNDER AND EXECUTIVE CHAIRMAN OF AMAZON: “When people get very excited as they are today about artificial intelligence, for example, every experiment gets funded … And investors have a hard time in the middle of this excitement distinguishing between the good ideas and the bad ideas,” Bezos said during the Italian tech week on October 3.
“A bubble like a banking bubble, a crisis in the banking system, that’s just bad … The ones that are industrial are not nearly as bad, it could even be good because when the dust settles and you see who are the winners, society benefits from those inventions.”
Bank of England: Global markets could tumble if investors’ mood sours on the prospects for AI, the Bank of England said on October 8.
“The risk of a sharp market correction has increased,” the BoE’s Financial Policy Committee said in a quarterly update, in its sharpest warning to date of the dangers of an AI-triggered market slump, adding that the risk of spillovers to Britain’s financial system from such a shock was “material”.
Bryan Yeo, CHIEF INVESTMENT OFFICER AT GIC: “There’s a little bit of a hype bubble going on in the early-stage venture space,” said Singapore sovereign wealth fund’s Yeo during a panel discussion at the Milken Institute Asia Summit on October 3.
“Any company startup with an AI label will be valued right up there at huge multiples of whatever the small revenue (is) … That might be fair for some companies and probably not for others.”
Joseph Briggs, ECONOMIST AT GOLDMAN SACHS’ GLOBAL ECONOMICS RESEARCH: The flood of multibillion-dollar investments pouring into U.S. AI infrastructure is sustainable, pushing back on mounting concerns that the sector’s spending spree could be overheating, Briggs said in a note on October 16.
While the overall macroeconomic case for AI investment remains strong, he cautioned that “the ultimate AI winners remain less clear”, with fast technological change and low switching costs potentially limiting first-mover advantages.
Pierre-Olivier Gourinchas, CHIEF ECONOMIST AT IMF: The AI investment boom in the U.S. may be followed by a dotcom-style bust, but it is less likely to be a systemic event that would crater the U.S. or global economy, Gourinchas said on October 14.
“This is not financed by debt, and that means that if there is a market correction, some shareholders, some equity holders, may lose out.”
Sam Altman, CEO OF OPENAI:
“Are we in a phase where investors as a whole are overexcited about AI? My answer is yes,” Altman told tech media The Verge in August.
“Someone is going to lose a phenomenal amount of money. We don’t know who, and a lot of people are going to make a phenomenal amount of money.”
Michael Burry, INVESTOR AND FOUNDER OF SCION ASSET MANAGEMENT: The “Big Short” investor has placed bearish bets on Nvidia and Palantir.
Last month, in his first X post in more than two years, Burry warned of a bubble, fanning investor concerns over inflated spending in the AI and tech industry.
UBS: Almost as many investors who feel we are in an AI bubble are also hanging on to their investments in the sector, UBS equity strategists said on October 14.
“Most felt we were in an AI bubble, but that far from the apex of a bubble peak and thus around 90% of the people who said we were in a bubble said they were still invested in many of the AI-related areas.”
Published – November 18, 2025 07:23 pm IST