Startup Europe — The Sifted Podcast Ex-Google CEO Eric Schmidt: 'The AI bubble is a good thing'
Oct 14, 2025
Former Google CEO Eric Schmidt discusses the undervalued potential of AI, suggesting current bubbles can foster innovation. He emphasizes lessons from Ukraine's military automation and proposes how Europe can strengthen its tech sector to compete globally. Schmidt also critiques existing valuations of AI firms, debates the risks of self-improving agents, and addresses the urgency of Western responses to automated warfare. He encourages European founders to aim for ambitious growth rather than quick exits, highlighting opportunities in regulated AI applications.
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AI Is Undervalued Today
- Eric Schmidt argues current AI will far exceed human ability over time using examples from image recognition to GPT adoption.
- He believes the technology is underhyped and expects validation in five to ten years.
Why High Valuations Could Make Sense
- Schmidt runs a thought experiment where a single company achieving general intelligence would be worth an almost unimaginable sum.
- He cites heavy capital commitments across firms as evidence investors expect enormous long-term returns.
Global Crossing's Lasting Infrastructure
- Schmidt recounts Global Crossing building dark fibre then going bankrupt while the infrastructure remained useful to others.
- He uses this to explain why industrial bubbles can leave valuable assets behind.
