Alphabet Inc. Class C (GOOGL.US) CEO warning: There are irrational factors in the current AI market. If the bubble bursts, no company will be spared.

Amid the soaring valuations and massive investments in the current artificial intelligence (AI) field, Alphabet Inc. Class C (GOOGL.US) CEO Sundar Pichai stated that if the AI bubble bursts, no company will be spared. Pichai said in an interview on Tuesday that the current wave of AI investment is an "extraordinary moment," but he acknowledged the presence of "irrational factors" in the market. Pichai's statement echoes comments made by former Federal Reserve Chairman Alan Greenspan in 1996. At that time, Greenspan warned of an "irrational exuberance" in the internet market. A few years later, the market experienced the collapse of the internet bubble. Pichai said that in the current investment cycle, the AI industry may indeed experience "overreactions." However, he also said, "We can look back at the development of the internet. Obviously, there was a lot of overinvestment then, but we would never question the profound significance of the internet." "I expect artificial intelligence to be the same. So I think that at a moment like this, it has both rational and irrational elements." When asked how Alphabet Inc. Class C would deal with a potential bubble burst, Pichai said he believed the company could weather the storm because Alphabet Inc. Class C has a "full stack" unique model ranging from chips to YouTube data, models, and cutting-edge science, meaning it is better equipped to handle any turbulence in the artificial intelligence market. But he added, "I don't think any company can escape, including us." Furthermore, Pichai also mentioned that Alphabet Inc. Class C will begin training models in the UK. UK Prime Minister Boris Johnson hopes this move will elevate the UK to become the world's third-largest AI "superpower" after the US and China. In September of this year, Alphabet Inc. Class C committed to investing 5 billion in the UK's AI infrastructure and research over the next two years, including the construction of a new data center and investment in its London AI lab DeepMind. Pichai also warned that the energy demands of AI are "huge" and said that with the expansion of computing power, Alphabet Inc. Class C's net zero emissions target will be delayed. Data shows that investors are betting on Alphabet Inc. Class C's ability to compete with OpenAI, with the stock price rising by approximately 46% so far this year. Alphabet Inc. Class C's standout performance in the AI field has even attracted the attention of Warren Buffett, who rarely invests in technology stocks. Berkshire Hathaway's latest 13F filing shows that the company initiated a position in Alphabet Inc. Class C for the first time in the third quarter of this year, buying approximately 17.85 million shares. Will NVIDIA Corporation's earnings report burst the "AI bubble theory"? Concerns about the sustainability of AI trading and high valuations in the market are key factors leading to poor recent performance in the US stock market. NVIDIA Corporation's (NVDA.US) earnings report due to be released this Wednesday will shed light on the latest developments in AI trading for investors. Wedbush analysts point out that the data released by NVIDIA Corporation this week will be crucial in convincing investors who are taking a wait-and-see approach that the current trend of AI investments is an unprecedented moment in modern tech history, rather than a period of bubble formation. It is worth noting that several Wall Street institutions have recently spoken out against the "AI bubble theory." Jeff Krumpelman, Chief Investment Strategist and Head of the Stock Department at Mariner Wealth Advisors, noted that technology stocks experienced volatility over the past week, with investors withdrawing from popular AI stocks of the year. However, he emphasized that this is more of a profit-taking and pause-induced fluctuation rather than a substantive change in AI or profit fundamentals. The strategist stressed that early-stage AI applications remain a strong theme that will continue for several years, and the current fluctuations should not be compared to the period of the bursting of the internet bubble. Dan Ives, Director of Technology Research at Wedbush, described the current market's tense sentiment towards AI trading as "short-sighted behavior" and asserted that tech stocks - the main force driving the rise of the US stock market in the past two years - the bull market will persist for at least two more years. Earlier, Cliff Asness, Co-founder of American quantitative investment giant AQR Capital Management, stated that current valuations in the US stock market are at relatively high levels historically but have not reached the level that can be considered a "bubble." JPMorgan also sees investment opportunities in the concerns about the sustainability of AI trading in the market, with analysts believing that the bullish narrative underpinning the stock market's long-term AI fundamentals remains intact, which could create significant buying opportunities during pullback periods. Goldman Sachs Group, Inc. released a report stating that the AI investment cycle still has room to progress and compared the current surge in AI spending and valuations to the early stages of the late 1990s tech boom, rather than a speculative peak.