Berkshire Hathaway CEO Greg Abel is leaning further into artificial intelligence, calling Google parent Alphabet a "significant player" in the technology after the conglomerate substantially increased its stake in the company during the second quarter.
Speaking with CNBC on Wednesday, Abel said Berkshire's sprawling portfolio of businesses has given the company a firsthand look at how AI is being deployed and the benefits the technology can generate.
"We have a lot of visibility from within our companies as to how we're using AI, what type of benefits it's delivering, so that brought incremental interest, and then we saw Google as a significant player," Abel said.
The comments offer new insight into Berkshire's growing bet on Alphabet, an investment that stands out for a conglomerate historically associated with businesses such as insurance, railroads, energy and consumer products rather than rapidly evolving technology. Abel said Berkshire initially took a $10 billion position in Google about 15 months ago through a transaction completed at a 6.5% discount.
"They hadn't set the size, but recommended that we consider 10 billion. And Warren and I discussed the size. We discussed the size of discount, and I'd recommended 6.5% discount, and we were comfortable with that," Abel said. "Then ultimately consummated the transaction."
Berkshire dramatically expanded that investment during the second quarter, adding about $17 billion worth of Alphabet shares. The purchases made Alphabet the third-largest holding in Berkshire Hathaway's equity portfolio, according to the company's portfolio snapshot filed with the Securities and Exchange Commission in August.
As of Berkshire's latest filing, the company owned approximately 106 million Class A and Class C Alphabet shares. That position is currently valued at roughly $36.6 billion.
Alphabet was Berkshire's largest portfolio addition during the quarter. The conglomerate also increased its stake in Delta Air Lines by 44%, representing an investment of approximately $1.6 billion.
The Alphabet investment comes as Google and its biggest technology rivals spend unprecedented amounts of money building the infrastructure required to develop and operate increasingly powerful AI systems.
Google is among five major hyperscalers pouring capital into AI computing capacity alongside Microsoft, Meta, Amazon and Oracle. Goldman Sachs estimates global hyperscaler capital expenditures could reach roughly $1 trillion in 2026, although estimates vary significantly depending on what infrastructure and spending categories are included.
Goldman researchers said in an August analysis that the frequently cited estimate of $794 billion in hyperscaler capital spending could understate total global AI investment by approximately a whopping $200 billion.
