# The AI market may be frothy in some areas, not all

Markdown copy of https://realalpha.app/s/the-ai-market-may-be-frothy-in-some-areas-not-all/ on Real Alpha, the best minutes from long interviews with the people building AI. Cite and link the page, not this copy.

- Speaker: [Demis Hassabis](https://realalpha.app/builders/demis-hassabis/) · Demis Hassabis is CEO of Google DeepMind.
- Host: [Alex Kantrowitz](https://realalpha.app/people/alex-kantrowitz/) · Founder, Big Technology · Former BuzzFeed News senior tech reporter and author of Always Day One.
- Show: Big Technology Podcast
- Episode: [Google DeepMind CEO Demis Hassabis: AI's Next Breakthroughs, AGI Timeline, Google's AI Glasses Bet](https://realalpha.app/v/bgBfobN2A7A/), Jan 23, 2026
- Moment: 20:13 to 23:50 of the episode (4 min), playing on https://realalpha.app/s/the-ai-market-may-be-frothy-in-some-areas-not-all/; the episode from there: https://realalpha.app/v/bgBfobN2A7A/?t=1213

## Quote

> “I think **parts of the AI industry** probably are. And other parts, I think it remains to be seen.”
> — [Demis Hassabis](https://realalpha.app/builders/demis-hassabis/) at [22:26](https://realalpha.app/v/bgBfobN2A7A/?t=1346) · Big Technology Podcast

## Takeaways

1. He sees the AI bubble question as uneven, not a yes-or-no call.
2. Some huge seed rounds without products or research look unsustainable to him.
3. Alphabet can benefit whether AI strengthens existing products or creates new markets.

## About this segment

Demis Hassabis calls an AI infrastructure collapse possible but unlikely, and argues that AI’s scientific impact and product potential are already clear. He separates frothy startups from businesses with products AI can improve.

From “Google DeepMind CEO Demis Hassabis: AI's Next Breakthroughs, AGI Timeline, Google's AI Glasses Bet”, Jan 23, 2026. [Watch the full episode](https://realalpha.app/v/bgBfobN2A7A/)

## Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

[20:18](https://realalpha.app/v/bgBfobN2A7A/?t=1218) could all fall apart, and I want to run it by you. So it's a three-step process. The first is that large language model training runs produce limited returns uh the second is that there are flash models like gemini flash that run ai computing as cheap as search and then step three is that the massive infrastructure commitments uh that have been made become somewhat useless given those two factors and there is a cascading collapse that happens is that a legitimate worry um i think it's a plausible possible scenario. I don't think it's the likely one, in my opinion. I mean, in my mind, there's no doubt. AI's gone already proved out enough, I would say, and our work, I think, in things like science and AlphaFold and drug discovery that it's here to stay.

[21:05](https://realalpha.app/v/bgBfobN2A7A/?t=1265) It's not like tomorrow, like, oh, we found that AI doesn't work. We've blasted way past that. So I think it's clearly going to be the most transformative technology in human history. There's maybe a question mark about timelines. Is it two years or five years? I I mean, either way, it's very soon for something this transformative. And I think we're still in the nascent era of actually figuring out how to make use of it and deploy it because the technology is improving so fast.

[21:30](https://realalpha.app/v/bgBfobN2A7A/?t=1290) I think there's a huge capability overhang, actually, of what even today's models can do that maybe even us as building those things don't fully know. So I think there's just a vast amount of product opportunities that we see. And I think we're, as Google only, just starting to scratch the surface now of actually natively sort of plugging these things in to our amazing existing products, let alone building the new ones.

[21:54](https://realalpha.app/v/bgBfobN2A7A/?t=1314) You know, AI Inbox, we've just started trialing. I mean, who wants to do email admin? I mean, wouldn't we all love that to just go away? That's my number one pain point for my work, King Day. And there's so many examples like that just waiting to be addressed, I think. you know, agents in browsers, helping out with YouTube. Obviously, we're now powering search with it. So I think there's enormous opportunities. And if you're talking about the AI bubble, if that's the question. I was trying to not ask the AI bubble. Well, I think it's fine. I mean, it seems like that's the question. I'm very happy to answer it. Because I think, look, my view is it's not binary. Are we in a bubble, not in a bubble? I think parts of the AI industry probably are. And other parts, I think it remains to be seen. So I think some of the things are,

[22:38](https://realalpha.app/v/bgBfobN2A7A/?t=1358) you know, when you see seed rounds of tens of billions of dollars of companies that basically have no product or research, it's just some people coming together. That seems a bit unsustainable to me in a normal market, a bit frothy. On the other hand, you know, we're businesses like us. We have massive underlying businesses and products that it's very obvious how AI would increase the efficiency or the productivity of using those products. And then it remains to be seen how popular the monetization of these new ai native products like chatbots glasses all of these things um we'll have to see i think there will be enormous markets but they're yet to be proven out but from my perspective you know running google deep mind is um my job is to make sure that whatever happens with an air bubble if it if it if it bursts or if there isn't one and it continues

[23:27](https://realalpha.app/v/bgBfobN2A7A/?t=1407) we win either way right and i think we're incredibly well positioned as alphabet uh in either case um and you know doubling down on existing businesses in the one case or being at the forefront and the front here uh in in the in the bull case going back to thinking game speaking of the way that this will impact the economy i started to feel bad for the opponents of your