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Now, let's move on because the head of Google has told the BBC that no company would be immune if the current high valuation of AI tech firms turns out to be a bubble and bursts. Sunda Pitchai said that the boom in artificial intelligence had what he described as irrational elements. Mr. Pitchai, who has run the company for a decade, also said AI models should not be blindly trusted and warned that governments would have to invest in more infrastructure to cope with the technologies immense energy needs. Here's what some of what he told our economics editor Fisel Islam.
>> Oh, it's an extraordinary moment by uh even by Silicon Valley standards. You know, every decade or so, you know, you have this inflection points. You know, you have a new technology was a personal computer uh at one point, the internet coming in the late 90s, then it was mobile. uh then it's been cloud what we call as cloud and now it's the clearly the era of AI >> and and can you just a sense of of the scale the sheer amount of investment going in >> you know maybe four years ago Google was spending less than $30 billion per year this year uh that number is going to be over $90 billion and if you collectively add what all the companies are doing uh you know we have well over a trillion dollars of invest ment going in in building the infrastructure for this moment. >>
Now you mentioned some of those phases of technological advancement that happened with much market excitement as well and the obvious question it's around the whole of this country and the whole of the world right now is is it a bubble? >> You see real demand and we are constrained in our ability to serve that demand. So you know so and and given the potential of this technology the excitement is very rational. Uh it's also true when we go through these investment cycles uh you know there are moments we overshoot right collectively as an industry we can look back at the internet right now there was clearly a lot of uh excess investment but none of us would question whether the internet was profound or did it drive a lot of impact it's fundamentally changed how we work digitally uh as a society I expect AI to be the same so I think it's both rational And there there are elements of irrationality through a moment like this. No company is going to be immune including us. If you overinvest, you know, we'll have to work through that phase. For many years, we've taken a deeply differentiated approach to how we've approached AI. So, we are better positioned to take a long-term view and approach this moment. >>
Well, with me now is our economics editor, Fisel Islam, and our AI correspondent, Mark Chislac. Thank you both very much for coming in. Uh, Fisel, quite an interview. Um the AI bubble has been talked about for some time. It is significant and really interesting to hear what we heard there from Cinder Pitch. >>
So I think it's important to get the context for those people who don't necessarily follow financial markets and of going out to Silicon Valley to the Mountain View headquarters of Google. One really got a sense of the total frenzy in terms of this AI investments and it you know all those all those things we're typing in all those prompts we're typing in about the sheer infrastructure needed the energy needed and you're talking trillions of dollars. And he just mentioned there they trebled their investment 30 to 90 billion a year. Other companies are doing the same. He talks about a trillion dollars of investment going in. So if you like that is what we're coming off. And so the question arises how much of this is real. Now his answer to me was that a lot of it's real. It's going to change the world. They would say that wouldn't they? But I think there's some truth to that. Um but elements of it uh reflect a certain amount of rationality. I think in the markets what you're seeing is a distinction between the big companies that have massive revenues. Google scored hundred billion dollars of revenue in a quarter from existing search business and some AI. Others have gen like Amazon uh are generating cash and they're spending it almost all on this investment in AI. There are other parts of this ecosystem where they're borrowing the money slightly weird deals exotic lending. I think that is probably where the markets are looking and it's probably where Sun Kai was suggesting there were elements of irrationality. That doesn't mean the whole AI thing is going to collapse. even joined the dotcom bubble, the famous one 25 years ago. Remember goo, Amazon's share price went down to $6. They're now a $4 trillion company. So I think people are waiting for a shakeout. So interesting views from him. And the sort of implicit thing there was that Google is better positioned in his view to ride out what might be a shakeout that a lot of people are talking about because they invest in things like massive super chips as well as the big models. >>
Absolutely. Uh Mark, what was your take from the interview? Um there's an element of digital Darwinism if you like going on here. Um Jeff Bezos a couple of months ago sort of alluded to to similar things that the the strongest companies will survive and there are sort of you know it is reminiscent of the dotcom bubble at the at the turn of the century. But a lot of this is about valuation. Google is in a really really good position in terms of it's very diversified. It search business is absolutely enormous. It owns companies like YouTube and then you've got new companies into the AI space like Open AI that have these huge valuations at $500 billion or something in that in that kind of region >> or higher >> or higher than that. Yeah. And they don't have the same kind of product. Yeah. They don't have the same kind of product lineup. They're not they don't have the same kind of revenue that Google has. So Google is very very insulated from some of this talk of a bubble where companies like OpenAI certainly aren't. >>
Stay with us for a moment. We're just going to uh mention that our viewers on BBC 2 are leaving us. We are staying here on the news channel. If you want to follow this discussion, uh we are here on B News throughout the day. I'm Gita Guramuthi. Sorry to interrupt you. Um and and and Fel you might know, I know Mark knows that I am just new into AI because I'm doing a masters in AI ethics. So I'm trying to get my head around it. But the the jobs question and the retraining question, the reskilling is one that comes to the forefront of any discussion you have on AI. What did in the pitch I teach you about that? Because like what do we tell our children? What do we do ourselves? >>
Exactly. Well, it's quite striking. You see the sheer amount of investment kind of what's this actually going into? And I put it to him. It's about automating many human tasks, is it not? Human jobs, potentially livelihoods. Um, and you know, I think when you talk to some of these tech bosses, they want to stress the win-win. Oh, it's okay. everyone can retrain and it's all right and you know but like what I do detect now is a certain amount of reality and I think some of our viewers will be seeing it now if they've got graduate uh you know age kids they'll be seeing it quite tough in the jobs market some of the jobs that we would have expected in creative industries in the law in accountancy they're proving tougher because some of them are being automated via these large language models not always successfully in terms of some of the the issues around that but uh yes I think he acknowledged And of course his answer was you train yourself up using AI use the tools and if you know how to use it you'll be better placed in the jobs market. >>
Mark very quickly the question of trust and truth was also came up. Are people just navigating a new frontier where they they type in something on on AI they and they should know that they've got to go and check it with a search. >> Everybody now has to absolutely question everything they see on social media for instance and they also have to question what they do if they use a chatbot to try and determine answers from it because they make stuff up. They hallucinate. They get things wrong all the time. A lot of these products are not ready for prime time quite yet. They have quite a lot of utility, absolutely, but if you're relying on them for accurate answers, for replicable answers, then you're you're looking at the wrong kind of tech quite