Warren Buffett and Berkshire’s new CEO pick Alphabet to win AI buildout stakes

Berkshire Hathaway’s new CEO, Greg Abel, has given some rare insight into why the firm now counts Alphabet (NASDAQ: GOOG) as its third-largest stock holding.

CEO Greg Abel said Berkshire Hathaway is going all-in because it believes the tech giant will benefit from the AI boom through the Google stock itself and the electricity its utilities can sell to data centers. 

How can Berkshire win from AI? 

Berkshire Hathaway’s CEO, Greg Abel, has described Alphabet as a “significant player” in AI. Abel said that his perception of the company is what led him and Warren Buffett to sign off on an extra $10 billion in Alphabet stock three months ago. 

At the end of June, Berkshire owned about 106 million Alphabet shares that were worth around $37.8 billion. That makes Alphabet Berkshire’s third-largest stock holding, behind only Apple and American Express. It also represents roughly 10.4% of Berkshire’s total cash reserves, which were $364.7 billion on June 30.

Buffett was the first to buy in on Alphabet’s stock during the third quarter of 2025. He confirmed in a July Fortune interview that it was originally his decision, adding that Abel only makes moves with his approval. However, Abel has taken responsibility for the most recent purchase, which he timed to get a 6.5% discount on Alphabet’s share price.

Buffett, who previously said in a July CNBC interview that Google is “more likely to be a winner” says he changed his view once big tech companies started spending heavily on data centers and chips. 

Will Berkshire Hathaway sell its energy? 

Abel estimated that in Iowa, which is home to Berkshire Hathaway Energy, data center customers accounted for about 8% of demand last year. 

The company’s 2025 annual filing explains that its U.S. operations run 32,400 net megawatts of generation capacity in service or under construction, drawing on wind, gas, coal, solar, hydro, nuclear, and geothermal sources. 

Berkshire Hathaway Energy plans to spend around $33.5 billion through 2026 to expand generation, storage, and transmission. However, Abel’s condition on any deals with the hyperscalers is that other customers cannot end up with higher rates because of them; ideally, prices should fall.

Buffett pointed to IBM’s recent revenue miss and said the AI spending war is forcing hyperscalers to spend just because their rivals are. 

Buffett noted that Alphabet itself is roughly doubling its AI spending to around $185 billion, a figure he said keeps the CEO Sundar Pichai up at night.