Berkshire's Alphabet stake grows in Q2 as Buffett bets on AI

Warren Buffett personally steered Berkshire Hathaway into Alphabet in the second quarter, betting on the Google parent's artificial-intelligence edge in cloud computing and large language models, Chief Executive Greg Abel said Sept. 2.

"Alphabet is a significant player in AI," Abel said, confirming that Buffett led the position rather than delegating it to Berkshire's investment deputies.

Berkshire grew its Alphabet stake during the second quarter, Abel said, without disclosing the size of the holding. The rationale rests on Alphabet's AI advantages, spanning Google Cloud and the Gemini family of models that underpin the company's search and enterprise products.

Abel also flagged AI data centers as a major opportunity for Berkshire Hathaway Energy, tying the equity bet to the infrastructure buildout that has become a defining theme of the current AI investment cycle.

The endorsement carries unusual weight because Berkshire has historically steered clear of large technology bets, and Buffett has been publicly cautious about AI. His personal sign-off on Alphabet, rather than a decision by portfolio managers Todd Combs or Ted Weschler, gives the position the firm's most explicit seal of approval.

Alphabet's AI push centers on Google Cloud, which has narrowed the gap with Amazon Web Services and Microsoft's Azure as enterprises route workloads to Gemini-powered services. The company also embeds Gemini across its core search and advertising products, where AI-generated overviews have reshaped how queries are answered and monetized.

For Berkshire Hathaway Energy, the AI angle is infrastructure. Data centers that train and run large models consume far more electricity than conventional computing, and Abel's comments point to rising power demand as a growth driver for the utility arm. That positions Berkshire to benefit from the same buildout that has lifted demand for Nvidia's graphics processors and driven record capital spending at Microsoft, Amazon and Alphabet itself.

The investment also signals where Buffett sees durable value in AI: not in the hardware layer where Nvidia dominates, but in the application and cloud layer where Alphabet monetizes models through search, advertising and enterprise contracts. It is a bet on the software and services that turn raw model capability into revenue, rather than on the chips that train them.

For investors, the takeaway is that one of the world's most closely watched value investors has concluded Alphabet's AI position is durable enough to warrant a personal bet. That could draw follow-on buying from institutions that track Berkshire's quarterly filings, while the data-center comments reinforce the case for AI infrastructure spending to keep climbing through the next several years.

This article is for informational purposes only and does not constitute investment advice.