Google CEO warns: Rapid AI investment poses major economic risks

Staff Report | PNN

Sundar Pichai, CEO of Google’s parent company Alphabet, warned that AI-based investment, growing at unprecedented speed, could pose major risks in the future. He said the current AI investment frenzy, while remarkable, also shows signs of “irrationality.”

In recent months, the market value of AI-based companies has skyrocketed. Alphabet’s market value has doubled in seven months to $3.5 trillion. Meanwhile, Google’s efforts to develop its own superchips to compete with Nvidia have added further market excitement.

However, massive investments, particularly around OpenAI, totaling nearly $1.4 trillion, have raised skepticism among analysts, who argue that the returns don’t match the scale of investment.

Pichai believes investment cycles often exceed reasonable limits. “There was a lot of overinvestment during the Internet era, and its effects are still felt today. The same will happen with AI.”

JP Morgan CEO Jamie Dimon recently stated that AI investments will yield long-term benefits, but there is also a high risk of financial loss, a concern Pichai agrees with.

Google believes that controlling everything from chips to YouTube data, from models to scientific research, gives it a unique “full-stack” advantage for future stability.

Pichai revealed that Alphabet has announced a £5 billion investment in the UK, including strengthening AI research infrastructure with DeepMind. For the first time, Google will train its AI models in the UK, advancing the country’s aim to become an “AI superpower.”

According to international energy agency data, AI technology consumed 1.5% of global electricity last year. Pichai said, “Without energy infrastructure development, the economy will stagnate.”

He acknowledged that the additional electricity demand from AI poses a risk to Google’s 2030 net-zero climate targets but affirmed the company will not compromise on its goals.

Pichai said AI is the most “profound technology” in human hands and will transform the job market. “Society must go through significant change. Many types of work will change, but those who learn to use AI will advance.”

He added that AI will play a role across professions, from teaching to medicine, and AI proficiency will become increasingly important in defining skills in the future.