Google’s boss warns that no company will be safe if the AI bubble bursts. Bank of America says AI-bubble fear is now the top market risk. The regional banking crisis is getting worse.

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Every company would be affected if the AI bubble were to burst, the head of Google’s parent firm Alphabet has told the BBC.

Speaking exclusively to BBC News, Sundar Pichai said while the growth of artificial intelligence (AI) investment had been an “extraordinary moment”, there was some “irrationality” in the current AI boom.

In comments echoing those made by US Federal Reserve chairman Alan Greenspan in 1996, warning of “irrational exuberance” in the market during the dotcom boom and well ahead of that market crashing in 2000, Mr Pichai said the industry can “overshoot” in investment cycles like this.

“We can look back at the internet right now. There was clearly a lot of excess investment, but none of us would question whether the internet was profound,” he said.

“I expect AI to be the same. So I think it’s both rational and there are elements of irrationality through a moment like this.”

Full article: https://www.bbc.com/news/articles/cwy7vrd8k4eo

AI BUBBLE FEARS SURGE, BOFA SURVEY FINDS

Bank of America’s latest global fund manager survey shows the biggest market “tail risk” is an AI stock bubble.

• 45% of investors named an AI bubble as the top risk — up sharply from October.

• Only 17% cited rising bond yields (previously the #1 concern), and 16% cited inflation.

For the first time since 2005, a majority of respondents worry companies are overinvesting, driven by the massive AI capex boom. Tech firms are set to spend trillions on AI data centers, even as revenue returns remain uncertain.

53% of investors now believe AI stocks are already in a bubble (slightly down from last month’s record 54%).