Author: Nishtha Mehrotra | EQMint
Synopsis:
- Zoho founder Sridhar Vembu says the company will continue AI research but delay major infrastructure investments until market conditions stabilise.
- His remarks follow investor Chamath Palihapitiya’s claims that a significant share of AI spending is driven by unprofitable, venture-backed companies.
- Rising AI infrastructure costs have also affected Zoho, which cancelled its annual salary hikes for 2026.
Zoho founder and chief scientist Sridhar Vembu has warned against excessive investment in artificial intelligence, describing the current AI spending boom as a potential bubble.
Reacting to investor Chamath Palihapitiya’s comments on AI spending, Vembu said Zoho would continue investing in foundational AI research and development but postpone major infrastructure investments until a “less public time.”
Palihapitiya had argued that a substantial portion of AI spending comes from unprofitable, venture-backed companies, raising questions about the sustainability of the industry’s investment cycle.
Vembu has consistently maintained that while AI technology has genuine potential, excessive financial speculation could create risks. He has also compared the current investment cycle to the telecom bubble of the late 1990s.
The caution comes as Zoho faces rising infrastructure expenses. In October 2026, the company cancelled its annual salary hikes, with Vembu citing increasing AI usage, higher data-centre costs and an uncertain business environment.
Zoho’s approach highlights a growing debate in the technology industry: whether companies should prioritise aggressive AI infrastructure expansion or focus on sustainable, long-term investments.
Disclaimer: This article is for information purposes only and is not investment advice.
For more such information, visit EQMint
Join our WhatsApp channel for timely updates: Whatsapp
