DEVELOPING: Google boss says trillion-dollar AI investment boom has 'elements of irrationality'

Google boss says trillion-dollar AI investment boom has 'elements of irrationality'24 minutes agoShareSaveFaisal Islam,economics editor and Rachel Clun,business reporterShareSaveAlphabet boss Sundar Pichai has warned of some "irrationality" in the current AI boomEvery company would be affected if the AI bubble were to burst, the head of Google's parent firm Alphabet has told the BBC.Speaking exclusively to BBC News, Sundar Pichai said while the growth of artificial intelligence (AI) investment had been an "extraordinary moment", there was some "irrationality" in the current AI boom.It comes amid fears in Silicon Valley and beyond of a bubble as the value of AI tech companies has soared in recent months and companies spend big on the burgeoning 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 think no company is going to be immune, including us," he said.In a wide-ranging exclusive interview at Google's California headquarters, he also addressed energy needs, slowing down climate targets, UK investment, the accuracy of his AI models, and the effect of the AI revolution on jobs.The interview comes as scrutiny on the state of the AI market has never been more intense.Alphabet shares have doubled in value in seven months to 3.5tn (2.7tn) as markets have grown more confident in the search giant's ability to fend off the threat from ChatGPT owner OpenAI.A particular focus is Alphabet's development of specialised superchips for AI that compete with Nvidia, run by Jensen Huang, which recently reached a world first 5tn valuation.As valuations rise, some analysts have expressed scepticism about a complicated web of 1.4tn of deals being done around OpenAI, which is expected to have revenues this year of less than one thousandth of the planned investment.It has raised fears stock markets are heading for a repeat of the dotcom boom and bust of the late 1990s. This saw the values of early internet companies surge amid a wave of optimism for what was then a new technology, before the bubble burst in early 2000 and many share prices collapsed.This led to some companies going bust, resulting in job losses. KEY DETAILS: • A drop in share prices can also hit 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 well ahead of the dotcom crash, Mr Pichai said the industry can "overshoot" in investment cycles like this."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," he 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."His comments follow a warning from Jamie Dimon, the boss of US bank JP Morgan, who told the BBC last month that investment in AI would pay off, but some of the money poured into the industry would "probably be lost".But Mr Pichai said Google's unique model of owning its own "full stack" of technologies - from chips to YouTube data, to models and frontier science - meant it was in a better position to ride out any AI market turbulence.Don't blindly trust what AI tells you, says Google's Sundar Pichai'It's going to be really bad': Fears over AI bubble bursting grow in Silicon ValleyTech giants are spending big on AI in rush to dominate the boomThe tech giant is also expanding its footprint in the UK.