Google DeepMind CEO: AI investment is increasingly resembling a "bubble," but "even if the bubble bursts, we will be fine."

Google DeepMind CEO Demis Hassabis has issued a warning that the current investment frenzy in the artificial intelligence sector exhibits clear signs of "bubbling," with capital flows increasingly detached from business fundamentals.

According to the Financial Times, Hassabis pointed out at the World Economic Forum in Davos that some startups have completed billions of dollars in seed funding without any products or technologies in place, a phenomenon he described as "unsustainable." The market is not only experiencing irrational exuberance, but certain areas are likely to face corrections in the future. This statement sharply contrasts with the views of NVIDIA CEO Jensen Huang and Microsoft CEO Satya Nadella, who deny that the industry is over-invested.

Despite issuing a warning about the industry bubble, Hassabis emphasized that Google, with its scale and technological moat, is well-positioned to withstand potential market turbulence. He stated clearly, "Even if the bubble bursts, we will be fine," and pointed out that Google has a strong business foundation capable of enhancing productivity through AI capabilities, with demand for the company's latest model, Gemini 3, stronger than ever.

Valuation Detachment from Reality and Startup Risks

Hassabis expressed concern over the blind enthusiasm in the current venture capital scene. He noted that investors are eager to flock to startup groups like Thinking Machine Lab, founded by former OpenAI executive Mira Murati. Despite being established for only six months and disclosing almost no details about any products being developed, the company's valuation has reached $10 billion.

This phenomenon is seen as a typical case of market overheating. According to the Financial Times, Thinking Machine Lab has recently lost several key employees, raising doubts about its long-term prospects. Additionally, investors are beginning to worry about the billions of dollars being spent to build AI infrastructure, especially those high-leverage debt deals that rely on future technology adoption rates for support. Hassabis believes that this influx of funds detached from business reality could lead to a market correction in the future.

Google's Moat and Gemini 3

In the face of potential industry reckoning, Hassabis demonstrated confidence in Google's resilience. He stated that AI is "possibly the most transformative technology in history," and Google has rebounded from the difficult period following OpenAI's release of ChatGPT in 2022.

According to Hassabis, Google's current AI model performance has surpassed that of its smaller competitors, and it is closing the gap in the number of chatbot users. The parent company Alphabet has benefited from this, with its market capitalization surpassing $4 trillion. Hassabis emphasized that Google has an impressive business foundation that can achieve higher productivity by adding AI capabilities, which keeps the company safe amid industry turbulence.

Safety Hazards and Hardware Vision

Discussions at Davos also focused on the growing risks of AI. Recently, OpenAI faced lawsuits for its chatbot allegedly inducing young people to commit suicide, while Musk's xAI has been criticized for the Grok chatbot generating pornographic images. Hassabis emphasized the need to focus on safe and responsible AI development, stating that DeepMind will increase its investment in the application of AI in science and medicine.

Additionally, Hassabis reiterated Google's long-term vision for smart glasses. Despite Google Glass failing over a decade ago, he believes that a universal digital assistant will be the "killer app" for smart glasses. Google announced last year a partnership with fashion groups like Warby Parker to seek the launch of a new type of glasses that integrate AI.

Focus on Research Rather Than Succeeding as CEO

As a key figure in Google's future plans, Hassabis has gained more control and responsibility in its AI business in recent years. However, he denied speculation that he would succeed Sundar Pichai as CEO of Alphabet in the future.

Hassabis stated that he is very satisfied with his current work and enjoys being close to the forefront of science and research. He admitted, "There are limited things that can be done in a day, and enough time needs to be set aside for serious thinking."