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Sundar Pichai, CEO of Google’s parent company Alphabet, has warned that if the AI bubble bursts, no company in the world will be able to escape it. Pichai acknowledged that the period of investment in AI is extraordinary, but it also involves some ‘illogicality’. Amidst his statement, there is a huge decline in the markets around the world, which has increased the concern of investors.
New Delhi. Google and Alphabet CEO Sundar Pichai has expressed concern about the increasing ‘hype’ and huge investment in the AI sector. He said that this is a very exciting period, but there is a danger of ‘overshoot’ i.e. excessive investment. Pichai clearly said that ‘no company is safe, not even us.’ This statement of Pichai has come at a time when global markets have become highly dependent on AI stocks. Investors fear that this bubble might burst like the Internet boom.
Red mark in global markets, panic among investors
The effect of uncertainty regarding AI is directly visible on the stock market. London’s FTSE 100 index fell 115 points or 1.2 percent in a single day. It has fallen more than 300 points in the last four sessions. Experts said that the ‘flood of red flags’ i.e. the period of decline is continuing in the markets across the world. Even Bitcoin has come under this pressure and has lost all its earnings this year. Investors are now staying away from speculative i.e. risky assets.
Tension increased in Silicon Valley- Is AI overvalued?
The biggest question in Silicon Valley at the moment is whether the value of AI companies is being shown higher than it actually is? In the last months, AI stocks took the US market to record highs, but now questions are being raised on their prices. Many experts believe that the AI sector is growing rapidly, but this growth cannot last forever. Pichai also admitted that the tech industry often goes further than necessary in the investment cycle.
Competition between Alphabet and Nvidia, IMF has also given alert
Fears of an AI bubble are not limited to just companies; IMF and Bank of England have also warned on this. Meanwhile, Alphabet’s shares have doubled in seven months to cross $3.5 trillion. The company is also emphasizing on AI superchips, where it is now competing with giants like Nvidia, which recently joined the $5 trillion valuation club. Experts believe that if the AI bubble bursts, it will affect the entire tech sector and the global market.
