The AI boom isn’t slowing down—but some of the money flowing into the sector may be getting ahead of reality. Google DeepMind CEO Demis Hassabis recently warned that parts of today’s AI investment environment look increasingly “bubble-like,” arguing that in some areas capital is becoming detached from commercial fundamentals.

At the same time, Google is trying to turn its scale into an advantage: it continues rolling out Gemini 3 across consumer and developer products, while DeepMind-backed Isomorphic Labs pushes forward on AI-driven drug discovery collaborations.

Why Hassabis says it feels “bubble-like”

Hassabis’ main point is straightforward: some AI companies are raising extremely large rounds and commanding huge valuations before proving repeatable revenue or delivering mature products, which can create conditions similar to past tech bubbles.

His warning doesn’t read as anti-AI—more as a reminder that, eventually, the market tends to demand product quality, real user value, and sustainable unit economics.

Fierce competition—and Google’s distribution edge

Google has been positioning Gemini 3 as a major step forward in reasoning and usability, emphasizing that the model is designed to understand context better and require less prompting.

Google has also highlighted its reach: AI Overviews are said to have 2 billion users every month, and the Gemini app surpasses 650 million users per month—numbers that underline how distribution can matter as much as model quality.

AGI timeline: still aggressive, still uncertain

In public comments around this Davos media cycle, Hassabis has continued to discuss the road to AGI as a multi-year effort rather than something that arrives “next quarter,” reinforcing a strategic focus on long-term research plus productization.

For operators and investors, the practical takeaway is to plan for sustained competition, rapid product iteration, and periodic valuation resets—especially if macro conditions tighten.

Healthcare bet: Isomorphic Labs + Johnson & Johnson

Beyond consumer AI, Google’s broader AI narrative increasingly includes science and healthcare. Isomorphic Labs announced a cross-modality, multi-target research collaboration with Johnson & Johnson, combining Isomorphic’s AI-first approach to drug discovery with J&J’s drug development expertise.

The company says its drug design engine can generate candidates across modalities (including small molecules and biologics), and the collaboration is intended to leverage that multi-modality capability.