In all these years, Berkshire Hathaway Chief Warren Buffett hasn’t mouthed words about the difficulty he has had in understanding new technology. In fact, for years, the legendary investor let go technology stocks altogether, professing that he prefers “simple businesses,” and went on to say, “If there’s lots of technology, we won’t understand it.”
Although despite all his criticisms of technology, in recent years, Buffett has gathered a hugs fortune in stocks that are bound to profit from advancement of artificial intelligence (AI).
It is not surprising that Berkshire’s biggest bet on AI comes due to Apple. When combined with the shares held by Berkshire’s entirely owned subsidiary New England Asset Management, Buffett’s stake in Apple values more than 915 million shares, worth an eye-rolling $164 billion.
The iPhone maker is no stranger to AI technology, installing Siri on its iPhone in 2011, the first of its kind application of a voice-command digital assistant onto a smartphone.
And that was just the starting. The iPhone is now full of AI-supported features, balanced by the Apple Neural Engine. This on-device AI processor enables facial ID to unlock the device, natural language processing to help Siri better understand the user, as well as supporting Apple’s innovative and exceptional photography features.
The AI also supports several health and safety features, comprising electrocardiogram functionality, as well as detection of fall and crash.
Although, Apple has been largely silent on the topic of generative AI, the technology behind ChatGPT. At the company’s recent earnings call, chief executive Tim Cook said, “The potential is certainly very interesting.” He further added that since Apple doesn’t give opinions on product road maps, “it’s very important to be deliberate and thoughtful in how you approach these things.”
Several reports suggest the company’s next venture is to hire experts in generative AI. Known for its secrecy, there’s probably more going on behind the scenes at Apple. This probably isn’t all you’ll hear about generative AI from the company.
While Buffett himself didn’t initiate the purchase, Berkshire Hathaway also has a sizable stake in Amazon, with more than 10 million shares currently valued at more than $1.2 billion.
Buffett is often heard praising founder Jeff Bezos, saying he has admired Bezos “for a long, long time,” but “didn’t think he’d succeed on the scale that he has.”
Amazon, the e-commerce giant, has used AI since long to make personalized product recommendations to users, predict demand for its inventory, aid its extensive fulfillment and logistics operation, and make fast deliveries. The company also enables AI and machine learning via Amazon Web Services, its cloud computing operation.
The company was the first one to bring in a range of products infused with an AI-powered virtual assistant, helping make Alexa a household name. Recently, CEO Andy Jassy revealed that Amazon is “investing heavily” in the large language models that use generative AI.
Snowflake, a Data warehouse and analytics specialist, is out of the top three AI holdings for Berkshire Hathaway. Buffett lieutenant Todd Combs started the purchase: more than 6 million shares, which are now worth more than $1 billion. Combs, who is also CEO of Geico, which is owned by Berkshire Hathaway, had used Snowflake’s data warehouse with the company’s insurance operations.
Snowflake says its platform was “built from the ground up to support machine learning and AI-driven data science applications.”
Buffett has always been clear about his opinion of Apple. At Berkshire’s 2023 shareholder meeting in May, the legendary investor said of Apple, “It just happens to be a better business than any we own.”