Warren Buffett Hunts Artificial Intelligence Through the Energy and Infrastructure Door

Warren Buffett, the renowned businessman and billionaire who built his investment reputation by betting on traditional companies whose businesses he understands well, has found an indirect way to benefit from the artificial intelligence boom, staying away from the tech stocks that have dominated the scene in recent years. Instead of chasing the companies leading the AI race, Berkshire Hathaway has benefited from investments that provide this industry with what it desperately needs: energy and infrastructure.

This comes as Buffett, 96, ended an era spanning nearly six decades of leading Berkshire Hathaway after announcing his resignation as chairman, while remaining on the board as honorary chairman. During his tenure, he successfully transformed the company into one of the largest investment entities in the world.

For decades, Buffett focused on companies tied to the real economy, such as insurance, railroads, and utilities, adhering to the principle of investing in companies whose business models he understands well. While Berkshire holds stakes in major technology firms, its approach has not been based on chasing AI sector rallies or directly betting on the companies leading this race.

In an article published by CNN, it is noted that Berkshire is currently benefiting from the rapid growth of AI through investments that, at first glance, seem entirely removed from the tech world. Data centers powering AI applications require massive and increasing amounts of electricity, leading to a surge in energy demand and making utility and infrastructure companies key beneficiaries of this expansion.

AI was not part of the investment thesis at the time, but the significant shift in electricity demand over more than two decades has allowed this traditional investment to indirectly benefit from the AI boom.

CNN quoted Ken Mauney, head of asset management, as saying that Berkshire was already well-positioned to benefit from the core AI needs in the energy and utility sectors, noting that Buffett’s approach is to invest in companies that the economy will always need, without having to know in advance which company will lead the tech race.

MidAmerican Energy supplies electricity to states including Iowa, which has become a major hub for data centers. Greg Abel, Berkshire’s CEO, stated during the company’s annual meeting last May that data centers accounted for 8% of Berkshire’s total energy load in Iowa last year.