Greg Abel names Berkshire Hathaway’s two AI profit avenues
Berkshire Hathaway CEO Greg Abel identified two key AI profit avenues: supplying electricity to data centers and expanding investments in Alphabet. He highlighted the critical role of power supply for data center growth and acknowledged increasing community opposition to new facilities, stressing the need for developers to address local concerns, including water use. Abel cited Iowa as an example where data centers have provided significant tax benefits.
Berkshire Hathaway CEO Greg Abel outlined the company's dual strategy for profiting from artificial intelligence during a visit to Japan. The first opportunity involves supplying electricity to the expanding number of AI data centers through Berkshire Hathaway Energy, its energy unit. Abel noted that the availability of sufficient power is the primary limiting factor for building such energy-intensive infrastructure.
He emphasized that Berkshire Hathaway is prepared to provide electricity to hyperscale data centers, provided it does not lead to increased rates for other consumers. Abel also recognized the rising community opposition to new data centers across U.S. communities. He stressed the importance for developers to carefully evaluate local reactions and integrate concerns, such as water usage reduction technologies, into their projects. Citing Iowa, where Berkshire has a substantial energy presence, Abel pointed out that data centers have delivered considerable tax relief and revenue for local services, including schools and emergency departments.
The second profit avenue is Berkshire's nearly $36 billion investment in Alphabet, Google's parent company, which was initiated by Warren Buffett last year. Abel stated that the observed impact of AI on U.S. businesses by Berkshire's operating companies convinced him and Buffett of AI's significance, identifying Google as a major player in the market. Berkshire Hathaway recently acquired $10 billion worth of Alphabet shares directly at a discount, following Alphabet's $80 billion capital raise for AI computing infrastructure investments due to high customer demand.