Berkshire Hathaway CEO takes cautious AI stance
What's the story
Berkshire Hathaway's CEO Greg Abel has shared the company's cautious approach toward artificial intelligence (AI) and its future growth prospects. Speaking at the company's annual shareholders' meeting, Abel emphasized that any AI deployment would be "additive to our businesses." He also highlighted significant growth opportunities for Berkshire's utilities business due to rising power demand from data center buildouts.
AI strategy
Cautious approach toward AI deployment
Abel's comments on AI came as a contrast to the wider corporate trend of embracing this technology. He said, "We're not going to do AI for the sake of AI," and stressed that any use should be targeted at creating value while keeping in mind potential risks for humanity. This measured stance comes amid job cuts at companies like Snap Inc. and Atlassian due to their AI strategies.
Growth potential
Energy usage from data centers
Abel also highlighted growth potential of Berkshire's utilities business, owing to increasing power demand from data centers. He said energy usage from such facilities is already close to 8% of peak load in some regions. "If I look at our peak load... it's at 8%... [People in the industry] want to get to 5% to 10%, and we're already at 8% [so] we see opportunities to grow that by 50% over the next five years or potentially more," Abel said.
Portfolio distribution
Investment portfolio remains concentrated in blue-chip names
Berkshire Hathaway's investment portfolio remains heavily concentrated in a few blue-chip names. Its top five holdings, American Express, Apple, Bank of America, Coca-Cola, and Chevron, accounted for 61% of the equity portfolio's aggregate fair value at the end of March. The company reported an 18% year-on-year (YoY) rise in operating earnings for Q1, mainly due to a recovery in its insurance business, with underwriting profits rising by 28.5% to about $1.7 billion.