{"id":91141,"date":"2025-11-18T12:44:23","date_gmt":"2025-11-18T09:44:23","guid":{"rendered":"https:\/\/forklog.com\/en\/?p=91141"},"modified":"2025-11-18T12:46:48","modified_gmt":"2025-11-18T09:46:48","slug":"alphabets-chief-sees-irrationality-in-the-ai-market","status":"publish","type":"post","link":"https:\/\/forklog.com\/en\/alphabets-chief-sees-irrationality-in-the-ai-market\/","title":{"rendered":"Alphabet\u2019s chief sees \u2018irrationality\u2019 in the AI market"},"content":{"rendered":"

No company is immune to a potential bursting of the artificial-intelligence bubble, Alphabet chief Sundar Pichai said in an interview with BBC<\/a>.<\/p>\n

He sees signs of \u201cirrationality\u201d in today\u2019s AI frenzy. Pichai likened the moment to the dotcom boom, when the sector was flooded with excess investment. Yet, as with the internet, the fundamental importance of the technology is not in doubt.<\/p>\n

Pichai is confident Alphabet can weather any downturn thanks to a \u201cfull\u2011stack\u201d strategy\u2014the company controls everything from chip production to data processing and AI-model development.<\/p>\n

He also acknowledged that the high energy demands of AI have slowed progress toward the company\u2019s climate goals. Alphabet had planned to reach carbon neutrality by 2030.<\/p>\n

The executive also addressed AI\u2019s impact on the labour market. He called the technology \u201cthe most profound\u201d humanity has worked on and warned of coming \u201csocial shifts\u201d.<\/p>\n

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\u201cThe technology will change some professions, and people will have to adapt. Specialists who learn to use new tools will be more successful,\u201d he concluded.<\/em><\/p>\n<\/blockquote>\n

Investment in the sector<\/h2>\n

Amid the boom, investors are piling into AI companies. Analytics firm Databricks is discussing a new funding round that could lift its valuation to $130bn, The Information<\/a> reports, citing its own sources.<\/p>\n

That would be 30% above the $100bn valuation it received two months ago.<\/p>\n

In September Databricks raised<\/a> $1bn. At the time, company representatives said they planned to reach $4bn in annual revenue amid strong demand for AI products.<\/p>\n

Founded in 2013, Databricks provides a platform for data analytics and building AI applications. About 15,000 customers use its services, including Block and Shell.<\/p>\n

\u201cThe Big Short\u201d 2.0<\/h2>\n

Michael Burry, the investor who predicted the 2008 mortgage crisis, opened<\/a> short positions against AI giants Nvidia and Palantir worth $1.1bn. He believes a bubble has formed that will soon burst.<\/p>\n

Burry\u2019s hedge fund bought put options, betting on a decline in the shares of two key AI players.<\/p>\n

Palantir boss Alex Karp called<\/a> Burry\u2019s wager \u201ccomplete madness\u201d.<\/p>\n

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\u201cThe two companies he is shorting are the ones that are making all the money, which is very strange. [\u2026] Shorting chips and ontology is madness,\u201d he said.<\/em><\/p>\n<\/blockquote>\n

Karp stressed that Palantir raised its full-year revenue outlook after a record third quarter, and the company\u2019s shares have risen 173% over the past year.<\/p>\n

Nvidia CEO Jensen Huang also disagreed<\/a> with the investor\u2019s concerns.<\/p>\n

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\u201cI do not believe we are in an AI bubble,\u201d he said, noting that the company plans to generate half a trillion dollars in revenue.<\/em><\/p>\n<\/blockquote>\n

Huang argues that the United States is doing too little to advance artificial intelligence, and that restrictive policies toward China will ultimately harm American developers.<\/p>\n

Even so, after news of Burry\u2019s bet Palantir\u2019s shares fell nearly 9%, and Nvidia\u2019s by more than 3%.<\/p>\n

The economic backdrop<\/h2>\n

Burry\u2019s move comes amid a clear disconnect between Wall Street and the real economy. The seven largest technology firms, including Nvidia, account for 35% of the S&P 500\u2019s market capitalisation.<\/p>\n

Meanwhile, car repossessions are rising in the United States, wage growth is slowing and credit-card debt has hit record levels. According to Harvard economist Jason Furman, real economic growth is just 0.01% if the impact of AI and data centres is excluded.<\/p>\n

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Investment in information processing equipment & software is 4% of GDP.<\/p>\n

But it was responsible for 92% of GDP growth in the first half of this year.<\/p>\n

GDP excluding these categories grew at a 0.1% annual rate in H1. pic.twitter.com\/7p1eAI1aAa<\/a><\/p>\n

\u2014 Jason Furman (@jasonfurman) September 27, 2025<\/a><\/p><\/blockquote>\n