On Wednesday, Greg Abel sat down with CNBC's Becky Quick and made it clear Berkshire isn't guessing about AI's impact. "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," he said.
Abel said Berkshire moved into Google parent Alphabet roughly 15 months earlier, buying around $10 billion of stock with 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," he said. "Then ultimately consummated the transaction."
Berkshire's buying spree in the second quarter totaled $17 billion of Alphabet shares, according to its Q2 portfolio snapshot filed with the SEC in August, making Alphabet the conglomerate's third-largest equity position. Those purchases were the biggest addition Berkshire made in the quarter.
As of the most recent filing, the firm holds around 106 million combined Class A and Class C Alphabet shares, valued at about $36.6 billion. Berkshire also bulked up elsewhere, raising its Delta Air Lines stake by 44%, or roughly $1.6 billion.
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Google is one of five hyperscalers pouring money into data center capacity for AI, alongside Microsoft, Meta, Amazon and Oracle. Goldman Sachs estimates global hyperscaler capital outlays could run near $1 trillion in 2026, though it stresses there is a wide spread in projections.
"Estimates indicate that the commonly cited forecast for hyperscaler capex of $794 billion likely understates the total amount of global AI capex by around $200 billion. At the same time, the $794 billion figure likely overstates the amount of US investment in AI by $200 billion," a team at Goldman Sachs noted in an August analysis. In May they added, "A prolonged training-dominant phase extends the ROI timeline as CapEx and R&D continue to be deployed in advance of broad monetization."
For context, Alphabet's Class A shares were at 338.43, up 1.02% (+3.41), at 12:19 PM EDT. For everyday investors, the takeaway is simple enough: tech giants are spending heavily to lay AI's groundwork, and the revenue side may take time to catch up.