(C) Businees Insider

LONDON — Demis Hassabis, the co-founder and CEO of Google DeepMind, has warned that the staggering levels of investment in certain areas of the AI industry are beginning to resemble a speculative bubble.

Speaking with the Financial Times, the 2024 Nobel Prize winner in Chemistry noted that the current frenzy often ignores commercial logic. "The level of investment in some parts of the tech industry is disconnected from commercial reality," Hassabis stated, pointing to the massive capital raises by startups that have yet to demonstrate a tangible product or proprietary breakthrough.

While other tech giants like NVIDIA’s Jensen Huang and Microsoft’s Satya Nadella have recently downplayed concerns of overcapacity, Hassabis’s comments strike a more cautious chord. He argued that while AI is the most "transformative technology" in human history, the "unsustainable" nature of current seed-stage funding could eventually trigger a market-wide adjustment.

However, the CEO expressed unwavering confidence in Google’s trajectory. He noted that demand for Google’s AI integration—specifically the Gemini 3 model—is at an all-time high. This growth has propelled Google's parent company, Alphabet, to a historic $4 trillion market capitalization, overtaking several rivals to secure the spot as the world’s second-largest company by valuation.

Addressing the geopolitical AI race, Hassabis played down the recent shockwaves caused by Chinese firm DeepSeek’s low-cost models. He characterized the Western market's reaction as "overblown," asserting that U.S.-based research labs still maintain a critical six-month edge. According to Hassabis, while Chinese companies excel at practical, profit-oriented applications, Western leaders remain focused on the more ambitious and long-term goal of achieving Artificial General Intelligence (AGI).