Artificial Intelligence (AI) has flooded everything, surely you have also noticed that absolutely everything has AI integrated, and many experts have already warned that what we are experiencing is a bubble. But it is no longer just something from Twitter gurus, but those who are inside the AI hurricane are also warning about it, in this case, Sundar Pichai, CEO of Google and Alphabet, has stated that the sector is too hot and that there is a lot of irrational optimism… And that if it explodes… no one will be saved. Not even Google.
And yes, this year all tech companies are breaking every valuation record, and Alphabet has even risen more than 46 percent, but Pichai admits that it is not realistic or sustainable, that it smells like a bubble, and that sooner or later, it is going to explode.
From Silicon Valley
Pichai has always been enthusiastic about AI, of course, it is his project, but he is also worried. And anyone who knows a bit about processes knows that what rises quickly, falls quickly. This growth we are seeing is “extraordinary” (those were his words, yes) but too much money coming in too fast will make the projects not generate income…
Not even giants like Google will be able to survive the crash, because even if they have giant data centers, their own chips and tons of data, a market burst would drag the entire ecosystem.
Alphabet rising like foam…
Alphabet shares have a +46 percent this year thanks to Gemini 3.0 and the massive integration of AI in all their services. So far, all good.
But analysts believe that all of this is going faster than its real capacity to generate new income. And when valuation rises much faster than what the company produces…
Several banks and financial agencies have already issued formal warnings to start paying more attention.
It cannot last forever
Most of the money being poured into AI always ends up in the same five giants, Google, Microsoft, Amazon, Meta and Nvidia. So we could say that a tower has been built on these pillars, so if one fails (or if there is a big tremor) everything could fall.
AI consumes an insane amount of energy
You will have read it also every time something with generative AI becomes trendy, but training models and keeping them running requires electricity at levels we could not even imagine a few years ago, not to mention the water used to keep those fans cool…
If the sector continues to grow like this without solving the energy problem… bad news.
Startups would be the first to fall
If the bubble bursts, the first to fall would be those who have less experience or fewer funds, logically, and especially those business models based more on expectations than on real profits.
And why could even Google suffer from this?
Because even if it is a giant, it depends on external factors such as chips, data centers (which require investment) and an advertising market that would also fall.
Does this mean AI will disappear?
Not at all, it is not going to disappear or die (some would die without it). What would happen is that it would start slowing down, less hype, less smoke, and especially more projects that would have to show real results. And as always when a bubble bursts, those who survive will be the strong projects.
A delicate moment
Basically Pichai wants to say that we have to be careful with how companies are treating the AI topic, the bubble keeps growing, and while it does, companies need to have a plan B in case, long term (or short term), it decides to explode.