Berkshire Hathaway CEO Greg Abel outlined two paths the conglomerate is taking to capitalize on artificial intelligence during a CNBC interview from Tokyo on Wednesday. The company sees supplying energy to power-hungry AI data centers as a "significant opportunity," while also building a nearly $36 billion stake in Google parent Alphabet.
The energy opportunity and community pushback
Abel said providing electricity to data centers represents a major growth avenue for Berkshire Hathaway Energy. He has long viewed energy availability as the primary constraint for AI infrastructure buildout. "I've sort of always had a strong view that energy would be the constraint," Abel said. "We can produce the energy. It's, do we have a - how long it would take to get the sites prepared."
Berkshire will only sell power to hyperscalers under strict conditions. Abel said there must be "no impact to the rates of our other customers" and the arrangement should deliver a net benefit to existing ratepayers. He acknowledged growing opposition to data center construction across the country. "There is a lot more pushback in the communities across the U.S."
Companies building these facilities need to "seriously evaluate" community reaction, Abel said, pointing to water usage as one concern that can be addressed through technology. In Iowa, where Berkshire operates a substantial utility, data centers have provided "very, very substantial" property tax relief and revenue for local services like schools, police, and fire departments. Abel argued a data center must be a "welcomed member of the community."
How Berkshire built its Alphabet position
Abel described the sequence that led to Berkshire's $10 billion purchase of Alphabet stock directly from the company this spring, as Google's parent raised $80 billion to fund AI infrastructure. Warren Buffett initiated the original Alphabet position roughly 15 months ago. Then, in late May, Abel received a phone call on a Sunday morning offering participation in a large equity offering.
"They hadn't set the size but recommended that we consider 10 billion," Abel said. He called Buffett immediately. "I said we had a significant opportunity to continue to invest in Google with a significant block." The two agreed on a purchase at a 6.5% discount and completed the transaction. Abel said Berkshire's own operating companies gave him and Buffett visibility into AI's impact, and "we saw Google as a significant player."
Japanese investments and interest rates
Abel expects Berkshire to hold its stakes in the five Japanese trading houses - Itochu, Marubeni, Mitsubishi, Mitsui, and Sumitomo - "for many decades." He said none of the companies' executives raised rising Japanese interest rates as "a fundamental challenge right now," describing the 3% 10-year yield as "still relatively modest." Berkshire will continue issuing yen-denominated bonds as needed for future investments, despite the higher rates.
On Berkshire's partnership with Tokio Marine, Abel declined to comment on reports of a potential joint international acquisition. He described the strategic relationship as "very broad" with "no obligation to act on it," but added, "if it were to make sense, both for Tokio Marine and for ourselves, of course, we'd love to pursue a transaction with them."
Housing market outlook
Abel does not expect a quick recovery for U.S. homebuilders, calling it a "bumpy road for a while." Berkshire's $6.8 billion acquisition of Taylor Morrison was made with a long-term view. "That American dream will continue to exist," Abel said. "Five years, and 10 years from now, this will be a very strong asset for Berkshire."
On the broader economy, Abel said Berkshire's manufacturing businesses showed strong demand through the second quarter. But he noted the consumer is "still clearly feeling the pain and struggling and having to stretch a lot further with that dollar."
Why this matters for executives and strategy
Berkshire's dual approach to AI - infrastructure plays through energy and direct equity stakes in major technology firms - mirrors a broader strategic question facing corporate leaders: whether to invest in the picks-and-shovels layer or bet on platform winners. Abel's insistence on zero rate impact for existing utility customers also signals how regulated industries can pursue AI for Energy growth without triggering stakeholder backlash. For executives evaluating their own AI positioning, the Berkshire framework suggests patience, strict deal criteria, and a willingness to wait for discounted entry points rather than chasing momentum. The AI for Executives & Strategy implications are clear: disciplined capital allocation still matters, even in a hype-driven market.
Your membership also unlocks:
