Google CEO Sundar Pichai warns of AI bubble despite launch of Gemini 3.0

California: Amid a frenzy of artificial intelligence hype, Alphabet CEO Sundar Pichai issued a cautionary warning about an AI investment bubble on November 18, 2025, even as his company unveiled Gemini 3.0, its most advanced AI model to date. Pichai described the new Gemini 3.0 as the best multimodal AI model in the world, excelling across text, image, video, and audio understanding with industry-leading scores. Despite this technological leap, he highlighted "elements of irrationality" reminiscent of the dotcom bubble and warned that no company, including Google, would be immune if the AI bubble were to burst.

The timing of Pichai's warning is notable as Alphabet simultaneously announced a £5 billion commitment over two years to vastly expand AI infrastructure in the UK, including new data centres and DeepMind’s London and Singapore research labs. This aggressive expansion underpins Alphabet’s dominant position in the AI race and has driven its shares to near-record highs, making it the top performer among the "Magnificent Seven" tech giants this year. The company’s rise was further boosted by billionaire investor Warren Buffett’s Berkshire Hathaway taking a $4.9 billion stake in the firm.

However, the rapid growth of AI workloads has a steep environmental cost. Pichai acknowledged that Alphabet’s net-zero emissions targets are being delayed due to the "immense" energy demand of AI computing, with emissions rising by 51% since 2019. This has raised concerns as AI’s carbon footprint grows alongside its market hype.

Pichai also stressed the importance of users understanding the limitations of AI, cautioning against blindly trusting AI outputs. He emphasised the need for a "rich information ecosystem" where AI tools complement reliable sources like Google Search, reinforcing Google's multi-layered approach in AI deployment.

The market’s exuberance has led Bank of America to survey fund managers, finding that 45% now view the AI bubble as the top market risk. Despite this, financial analysts like Loop Capital recently upgraded Alphabet’s rating, citing the company’s strong position in AI search and development.