Google CEO Sundar Pichai delivered a ‘caution’ to employees during a recent all-hands meeting, warning that 2026 will be an “intense” year marked by heightened competition in artificial intelligence (AI) and mounting pressure to satisfy cloud computing demand. Pichai told the gathering that the workers cannot rest on their laurels and that there’s a lot of work to be done in this competitive moment. During the gathering, Pichai also addressed growing concerns about a potential AI investment bubble, a topic that is being increasingly debated among Silicon Valley executives and Wall Street analysts as skepticism mounts over whether trillions of dollars in projected AI spending can be justified.“Amid significant AI investments and market talk of a potential AI bubble burst, how are we thinking about ensuring long-term sustainability and profitability if the AI market doesn’t mature as expected?” Pichai read aloud a question posed by an employee. Pichai acknowledged the widespread nature of these concerns, stating, “It’s a great question. It’s been definitely in the zeitgeist, people are talking about it.”
However, the CEO emphasised his longstanding position that failing to invest aggressively poses greater risks than overinvestment. He pointed to Google‘s cloud division as evidence, which recently reported impressive 34% annual revenue growth, exceeding $15 billion in the latest quarter, with a backlog reaching $155 billion.“I think it’s always difficult during these moments because the risk of underinvesting is pretty high,” Pichai explained. “I actually think for how extraordinary the cloud numbers were, those numbers would have been much better if we had more compute,” he added.
Pichai says company “better positioned” than competitors
Pichai also reassured employees by highlighting Google’s disciplined investment approach and strong financial foundation, suggesting the company could weather potential setbacks better than rivals.“We are better positioned to withstand, you know, misses, than other companies,” he said, referencing the strength of Google’s underlying businesses.Looking toward the coming year, Pichai cautioned employees to expect volatility, noting there would be “no doubt ups and downs.”“It’s a very competitive moment so, you can’t rest on your laurels. We have a lot of hard work ahead but again, I think we are well positioned through this moment,” the CEO warned.The remarks come as Google faces intensifying competition in the AI sector from rivals including OpenAI, Microsoft, and Anthropic. Recently, a report said that OpenAI CEO Sam Atlman told employees in a memo that Google’s success could “create some temporary economic headwinds for our company.” Recently, Pichai issued a stark warning on the AI bubble, saying that the tech giant sees “elements of irrationality” in the booming market and that “no company is going to be immune” if an Al bubble were to burst.
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