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Google is raising $85 billion to build more AI infrastructure.
This move caught a lot of attention because of the big headline number, the fact that it is equity-based (as in Google is selling additional shares so there will be some dilution), and that Berkshire Hathaway, of all investors, is in for 10 of the 85 billion.
For investing nerds (like me), almost all of whom follow Warren Buffett’s empire closely, this move raised eyebrows. Buffett is famously not into technology; the Apple investment rationale is because it has the branding and pricing power of See’s Candies, not that iOS has better user interface than Android. Thus, many people thought Berkshire is losing discipline, perhaps because Buffett is aging or because the new CEO, Greg Abel, couldn’t resist the AI hype.
What most people tend to forget is that Berkshire is actually a huge energy company. Berkshire Hathaway Energy (BHE), its energy subsidiary, serves 11 states, including some hotbeds of new data center construction, like Iowa, Oregon, Nevada, and Illinois. More interestingly, Abel came from that energy lineage.
He was CEO of MidAmerican Energy before Buffett bought it, then later became BHE, which now encompasses MidAmerican, PacifiCorp, and NV Energy. He was an energy industry veteran, first and foremost, before anything else. It also perhaps was not so coincidental that Abel was from Alberta, the energy-rich province up north. Energy runs through his Canadian genes.
In fact, close followers of Berkshire annual meetings would not find today’s move that surprisingly. Two meetings ago in 2024 (this was the first time Abel was on stage with Buffett the whole time, after Munger’s passing), he said the following when answering a rather obscure question about utilities regulation in Utah:
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