The chorus of voices talking about an AI bubble is getting louder — and the participants are getting ever more prominent.
Demis Hassabis, CEO of Google DeepMind and one of the most respected figures in artificial intelligence research, has now added his voice to growing concerns about excessive valuations in parts of the AI industry. His comments are particularly notable given his position at the helm of one of the world’s leading AI research organizations and his role in developing breakthrough technologies like AlphaGo and AlphaFold.
In a recent interview, Hassabis offered a measured but clear warning about specific segments of the AI ecosystem. “My own opinion is that there are some parts of the AI industry that are probably in a bubble,” he said. “If you look at seed investment rounds being multi-$10 billion rounds with basically nothing — I mean there’s talented teams — but it seems like that that might be the first signs of some kind of bubble.”
The DeepMind CEO’s observation about seed-stage companies commanding multi-billion dollar valuations despite having little more than talented teams points to a fundamental disconnect between traditional valuation metrics and current AI investment patterns. His careful phrasing — acknowledging the talent while questioning the valuations — suggests a nuanced view that distinguishes between the technology’s long-term potential and short-term market exuberance.
While Hassabis didn’t name any names, there are a few companies that have amassed massive valuations without releasing any products or giving any updates about their progress. Former OpenAI Chief Scientist Ilya Sutskever’s SSI is valued at $32 billion, while former OpenAI CTO Mira Murati’s Thinking Machines is in talks to raise funds at $50 billion.
Hassabis is far from alone in his concerns. In recent times, more and more people are voicing concerns around an AI bubble. Just yesterday, Klarna’s CEO said that he was “very nervous” about the massive investments in AI datacenters. Last week, SoftBank sold its entire stake in NVIDIA worth $5.83 billion, and it emerged that Peter Thiel had done the same with his $100 million stake. For good measure, someone has remade the infamous “Here comes another bubble” Silicon Valley classic with an AI version of the song. And in an interview yesterday, Google CEO Sundar Pichai said that massive AI investments are both rational, and there are elements of irrationality — a statement that captures the tension between genuine technological progress and potential market excess. And with Demis Hassabis also warning about a potential bubble, it does seem that AI valuations are getting hard to digest, even to those with a ring-side view of the tech industry.