Berkshire Hathaway: AI Tourist or Energy Veteran?

This post originally appeared in Interconnected.

“AI is asset heavy, capital intensive, and energy hungry. It is the opposite of your stereotypical tech company.”

Google is raising $85 billion to build more AI infrastructure.

This move caught a lot of attention because of the big headline number, the fact that it is equity-based (as in Google is selling additional shares so there will be some dilution), and that Berkshire Hathaway, of all investors, is in for 10 of the 85 billion.

For investing nerds (like me), almost all of whom follow Warren Buffett’s empire closely, this move raised eyebrows. Buffett is famously not into technology; the Apple investment rationale is because it has the branding and pricing power of See’s Candies, not that iOS has better user interface than Android. Thus, many people thought Berkshire is losing discipline, perhaps because Buffett is aging or because the new CEO, Greg Abel, couldn’t resist the AI hype.