Berkshire Pivots for AI with Data Center Deals and Alphabet Stake
Berkshire Hathaway is positioning itself for the impact of artificial intelligence (AI) on the economy, according to Greg Abel, the company's vice chairman. In a recent interview in Tokyo, Abel outlined two paths into AI: supplying electricity to power-hungry data centers and owning more of Alphabet, the parent company of Google.
The first path involves Berkshire Hathaway Energy providing electricity to hyperscalers, companies that require massive amounts of power for their data centers. However, this will only happen if it does not impact the rates paid by other customers. Abel noted that there is growing pushback from communities against new data center projects, but he believes builders need to evaluate the reaction and use technologies that reduce water consumption.
Berkshire Hathaway's stake in Alphabet now sits at almost $36 billion, a position initiated last year by Warren Buffett. Abel stated that Berkshire saw Google as a significant player in the AI shift and will continue to invest in it. He also mentioned that Berkshire has been purchasing yen-denominated bonds to finance future investments in Japan.
In addition to its stakes in various Japanese companies, including Itochu Corp., Marubeni Corp., Mitsubishi Corp., Mitsui & Co., and Sumitomo Corp., Berkshire Hathaway is keeping optionality with Tokio Marine. Abel noted that there are no immediate plans for a partnership on a large cross-border purchase.