Google (GOOG) (GOOGL) DeepMind chief executive Demis Hassabis said parts of the artificial intelligence industry are showing signs of excess, warning that investment levels in some areas no longer reflect commercial reality, the Financial Times reported Sunday.
Speaking at the World Economic Forum in Davos, Hassabis said early-stage funding rounds for AI start-ups have grown unusually large, even when companies lack proven products. He said this imbalance could lead to pullbacks in certain parts of the market.
Other technology leaders at Davos downplayed fears of overinvestment. Still, investor enthusiasm has surged around young AI firms, including start-ups that have reached multibillion-dollar valuations with limited public detail about their technology.
Concerns have also grown around the rapid buildout of AI infrastructure, much of it financed with debt and dependent on continued growth in demand.
Hassabis said Google (GOOG) (GOOGL) is well positioned if the market cools. Demand for AI tools across its products remains strong, and the company can continue adding AI features to an already profitable business. He described AI as the most powerful technological shift yet.
Parent company Alphabet’s (GOOG) (GOOGL) renewed momentum has pushed its market value above $4 trillion, second only to Nvidia (NVDA). Google has also narrowed the gap with rivals in chatbot usage after lagging early following the launch of ChatGPT.
On global competition, Hassabis said western companies still hold a modest lead over China in advanced AI development. He argued that recent excitement around Chinese models reflected an overreaction, though he acknowledged that Chinese firms have moved quickly in building open and commercially focused systems.
He said U.S. labs remain more concentrated on long-term research aimed at artificial general intelligence, while Chinese groups are prioritizing near-term applications and revenue.
Hassabis also addressed growing scrutiny of AI safety following lawsuits and public criticism of leading chatbots. He said the industry must show clear public benefits and invest more in responsible development.
At Google (GOOG) (GOOGL), that includes work in science and medicine, areas he described as having clear social value.
Hassabis said advances in AI could also revive Google’s (GOOG) (GOOGL) ambitions in smart glasses. He said earlier versions failed because the technology lacked a compelling use case, but a powerful digital assistant could now fill that gap.
Despite his growing influence within Google (GOOG) (GOOGL), Hassabis dismissed speculation that he might eventually lead Alphabet. He said he prefers staying close to research and scientific work rather than taking on broader corporate leadership, according to the FT.