Berkshire warns on AI spending

Berkshire Hathaway is not joining the AI spending race just because everyone else is. That was the clearest message from Greg Abel in his first annual meeting as CEO on May 2, paired with first-quarter results that showed Berkshire has plenty of money to spend if it wants to. But Abel’s point was basically the opposite of the market mood right now — Berkshire will use AI where it helps, and ignore it where it doesn’t. That sounds simple. In 2026, it is a pretty direct rebuke to hype. ### What did Abel actually say? He said Berkshire is thinking hard about how technology can add value, but “we’re not going to do AI for the sake of AI.” He also framed Berkshire as a company that wants to build technology inside its businesses, not just buy into a trend from the outside. That is a very Berkshire answer — practical, decentralized, and allergic to buzzwords. (thestreet.com) ### Why does that line matter now? Because the rest of the market is moving in the other direction. Investors have spent the last two years rewarding companies that can tell the biggest AI story, and the largest tech companies are planning enormous capital spending to support that push. Abel is stepping into the CEO job at exactly the moment when “do more AI” has become a default demand from Wall Street. He is saying no — or at least, not unless the math works. (thestreet.com) ### Did Berkshire have the money to spend more aggressively? Yes — and that is what makes the message land. Berkshire ended the first quarter with a record cash pile of about $397.4 billion. Operating earnings rose to $11.346 billion from $9.641 billion a year earlier. So this is not a company preaching restraint because it has to. It is preaching restraint while sitting on one of the biggest war chests in corporate America. (thestreet.com) ### What drove the quarter? Insurance did most of the heavy lifting. Berkshire’s earnings release showed stronger operating performance overall, with insurance underwriting and related businesses helping offset weaker spots elsewhere. Net earnings came in at $10.106 billion, though Berkshire itself keeps warning that GAAP net income swings around with changes in the value of its investment portfolio and can be misleading quarter to quarter. That is why investors usually focus more on operating earnings here. (berkshirehathaway.com) ### Is this anti-tech? Not really. The catch is that Abel did not sound hostile to AI. He sounded selective. CNBC’s recap from the meeting shows him talking about using AI to add value across Berkshire’s businesses, and TheStreet’s account highlights the same idea — technology should be additive, not decorative. So the posture is not “ignore AI.” It is “prove it first.” (berkshirehathaway.com) ### Why is Berkshire’s version different? Because Berkshire is a weird company in the best way. It owns insurers, a railroad, utilities, industrial businesses, retailers, and more. In a setup like that, AI is less about one giant moonshot and more about hundreds of small operating decisions — pricing risk better at Geico, improving efficiency at BNSF, tightening workflows, catching fraud, reducing waste. Abel’s language fits that structure. He is not selling a grand platform story. He is asking each business to justify the tool. (cnbc.com) ### What should investors take from this? The real signal is about capital allocation. Abel is showing that the Buffett-era instinct — wait, measure, and only spend when the return is clear — is still intact after the CEO handoff. That matters beyond AI. It tells investors Berkshire is unlikely to chase whatever theme is hottest just to look modern. ### Bottom line Abel’s AI warning was really a Berkshire warning: technology is a tool, not a thesis. (cnbc.com) In a market rewarding narrative, Berkshire is still demanding evidence. (thestreet.com)