Berkshire Hathaway's Abel Discusses AI, Buffett Warns of 'Gambling' Market

In his first annual meeting as CEO, Berkshire Hathaway’s Greg Abel discussed a wide array of topics from artificial intelligence to his efforts to grow the conglomerate. Abel said the Omaha-based firm was thinking criticially about how to use AI to add value, saying that Berkshire wasn’t “going to do AI for the sake of AI.” Abel also walked through efforts to improve its railway and insurance businesses at the event, which has long been called “Woodstock for Capitalists.” Abel was joined on stage by members of his leadership team, but chairman Warren Buffett made remarks from the audience. Abel celebrated his predecessor by hanging a jersey from the rafters of the CHI Health Center, where the event is held each year. A deepfake version of Buffett also asked a question, prompting a discussion on the cybersecurity risks tied to AI. In a special sideline interview, Buffett told CNBC’s Becky Quick that he did not see the ideal investing environment. Ahead of the meeting, Berkshire’s latest financial report showed a record cash pile nearing $400 billion. Some highlights from the annual shareholder meeting: Buffett: ‘We’ve never had people in a more gambling mood than now’ Ajit Jain on insuring ships through Hormuz: ‘Depends on the price’ ‘We’re not going to do AI for the sake of AI,’ Abel says Opening video pays tribute to Buffett Berkshire’s operating earnings jump as cash hoard hits record near $400 billion Abel doesn’t see a single successor to Charlie Munger as his top adviser Asked who will play the Charlie Munger to his Warren Buffett, new CEO Greg Abel didn’t name a single person but talked about the team that surrounds him. “You surround yourself with great people, and they’re already here,” he said. Abel mentioned Adam Johnson, who serves as president of Berkshire’s consumer products, service, and retailing businesses and leads NetJets. He also mentioned Ajit Jain, vice chairman of insurance operations, and Katie Farmer, the CEO of BNSF Railway. All three of these executive spent some time on stage with Abel on Saturday. “Across our CEOs, we’re so fortunate to have a great group that I would reach out to any of them on a specific circumstance and ask them for their input,” Abel said. Abel says he does not see Berkshire breaking up or divesting subsidiaries Abel said he does not anticipate Berkshire Hathaway will ever break up or divest of its subsidiaries, in answer to a shareholder question to that point. He emphasized the lack of bureaucracy within Berkshire’s structure, as well as the conglomerate’s unique ability to move capital across groups. “We are a conglomerate but we are an efficient conglomerate,” Abel said. “We don’t have layers of management.” “We don’t see divesting of subsidiaries for that reason or breaking up the group,” he concluded. Abel on potential for divesting businesses: ‘It has to be a relationship that works’ While Abel said Berkshire aims to keep the companies it purchases, there are some situations where it may need to consider a sale. “When we buy something, it’s forever. When we acquire a utility, we tell the regulators it’s forever,” Abel said. “But it has to be a relationship that works,” he said. “If it’s broken, we’ll find a better path.” Abel said there could be hard-to-resolve labor issues or reputational risks that could lead Berkshire to divest a business. High energy prices weigh on consumer demand, Johnson says Adam Johnson, CEO of NetJets and president of consumer products, services and retailing, said higher costs — including periods of $100-a-barrel oil — have started to dent demand in some areas. “On the consumer product side, on the real retail side, it has affected some of the demand,” Johnson said, While acknowledging the pressure, Johnson said the businesses are accustomed to managing through volatility. “We’re prepared to deal with those things and make adjustments where we need to. But this certainly is affecting, I would say, some of the retail businesses and some of the consumer product businesses,” Johnson said. Buffett’s message to shareholders and partners: Follow the ‘Golden Rule’ Buffett said that the top rule shareholders and partners should follow is treating others as they wish to be treated — otherwise known as the Golden Rule. While the former CEO said he’s “not a religious guy,” he stressed that there has never been a better message spoken “in a couple thousand years than that.” “If the whole world lived by the Golden Rule, it would be such a more wonderful society,” Buffett told CNBC’s Becky Quick. “That’s true for everything from parenthood to being a boss.” “It doesn’t cost you anything. In fact, it’s reflected in better behavior toward you, so I mean it’s a very selfish sort of thing in one sense, but I’ve never seen anybody that’s unhappy that behaves that way,” he said. Buffett: ‘We’ve never had people in a more gambling mood than now’ During the lunch break, Buffett compared “markets to a church with a casino attached,” making a distinction between traditional value investing and current enthusiasm for short-term options trading along with increasing interest in prediction markets. “People can move between the church and the casino, and I would say there are more people in the church [than] people in the casino, but the casino has gotten very attractive,” he said. “If you’re buying one-day options or selling them, that’s not investing, it’s not speculating – it’s gambling.” Buffett said the enthusiasm for “gambling” is at a peak. “We’ve never had people in a more gambling mood than now,” he said. Buffett commented on the recent case of a U.S. soldier who allegedly used classified information related to a military operation in Venezuela to make $400,000 on a prediction market. The Department of Justice is currently prosecuting the case. “There’s nobody who can explain why they’re buying an option for one day unless they may have maybe [the chance to make] $400-and-some-thousand from knowing when we were going into Venezuela. … The quantity of those things is just incredible,” he said. Greg Abel returns to the stage for the afternoon session of the Berkshire annual meeting Greg Abel retuned to the stage at the CHI Health Center in Omaha, Nebraska, for the afternoon session of the Berkshire Hathaway annual meeting. Abel is joined by Katie Farmer, CEO of the BNSF railroad, and Adam Johnson, CEO of NetJets and president of consumer products, services and retailing. Buffett says Berkshire isn’t seeing ideal investing environment Buffett acknowledged displeasure with the investing backdrop as Berkshire’s cash hoard swells to records. “It isn’t our ideal surrounding area — or environment, I should say — in terms of deploying cash for Berkshire,” the former CEO told CNBC’s Becky Quick. Buffett said the conglomerate has the “right management” and can “pick our spots.” While it appears like Berkshire can appear to be doing “nothing” at some points, it’s “quite active” at other times, he said. Part of the hesitancy about investing capital was due to high prices in the market, he said. When asked when it will be a good time to invest, Buffett said it will come when “nobody else will answer their phones,” a hint to a pullback in market prices. Buffett’s comments came during a special sideline interview with CNBC. The Oracle of Omaha sat in the audience during the official meeting. Abel discusses succession plans for Jain and himself When asked about succession plans for Jain and himself, Abel said that the board approaches issues related to such matters “very seriously.” “They have a plan in place, and they discuss it,” he continued. “So, if Ajit were unable to perform in his role today or I was unable to perform, our board knows what action they would take.” AI is ‘still years away’ from tackling complex tasks, Berkshire’s Ajit Jain says Artificial intelligence could eventually be a “game changer,” but the technology’s ability to tackle more complex tasks such as stock picking is “still years away,” said Ajit Jain, vice chairman of insurance operations at Berkshire Hathaway. “If AI becomes reality, as is being projected, then there’s no question about it, it’ll be a huge game changer,” Jain said. But, “right now, what we are seeing is AI being used as a productivity tool, as a mechanism for reducing labor costs and doing routine, repetitive things.” The executive added that it is unlikely that AI will reach “a point where you can make a trade off on things like pricing, settling a claim” anytime soon. “That is still years away,” Jain said. “If you’re counting on AI to tell you which stock to buy and which one to sell, I don’t think that’s going to happen.” AI and the outlook for Berkshire’s businesses dominated morning session During the morning session, Abel focused a lot on the outlook for the various business segments. Artificial intelligence also was a key theme. That included Abel saying that his team is making moves to build out AI-powered solutions that could improve BNSF Railways. “There’s no question … this could be used across our other businesses,” Abel said, referring to the emerging technology. “We would build what we needed ourselves and deliver solutions back to our customers, a massive challenge, and it doesn’t happen overnight.” The executive noted that engineers and developers were hired to build those solutions. BNSF’s senior technology officer has also helped “drive forward” the business’ transformation. The freight transportation firm has come under pressure in recent years amid declining freight volumes. In response to its financial difficulties, BNSF did several rounds of layoffs in 2024 and 2025. Berkshire’s morning session has concluded The morning session of the Berkshire Hathaway annual meeting has concluded. While shareholders at the CHI Health Center take a break, programming on CNBC will continue, including an upcoming interview between CNBC’s Becky Quick and Buffett. Ajit Jain on insuring ships through Hormuz: ‘Depends on the price’ Asked about how and when he could offer insurance to ships crossing the embattled Strait of Hormuz, Berkshire’s vice chairman of insurance operations Ajit Jain gave a pithy response. “The short answer is – depends on the price,” he said, getting laughter and applause from the audience. Berkshire is participating in a “program” to insure ships moving through Hormuz, which has been closed or severely restricted during much of the U.S.-Israel war with Iran, but hasn’t written any deals for it yet, Jain said. “We ourselves have taken a small participation in a program that’s [been] put in place so as to write insurance for the ships in the Strait of Hormuz. We haven’t written any deals as yet,” he said. U.S. Navy escorts for transiting ships will be a condition of the underwriting process for the program, Jain said. “It’s still being fine tuned,” he said. “But if we can get our terms – in terms of the underwriting decisions and the fact that the U.S. Navy will escort these ships – we have put a price on which we will be comfortable underwriting that risk. But nothing’s happened as yet.” How Abel views Berkshire’s sprawling equity portfolio Abel offered fresh insight into how he views the company’s sprawling equity portfolio, emphasizing a concentrated approach anchored by a handful of core holdings. He described what he called the “core four” positions — Apple, American Express, Moody’s and Coca-Cola — as the foundation of Berkshire’s equity investments. He also pointed to the conglomerate’s sizable stakes in Japanese trading houses as another key pillar of the portfolio, emphasizing a long-term commitment to these companies. Beyond those anchors, Abel highlighted several other significant holdings, including Bank of America, Chevron and Alphabet. Berkshire bought about $4 billion of Alphabet stock in the third quarter of 2025. Abel is taking a more active role in overseeing the firm’s investments, saying he will actively manage it by adding to or rightsizing them at times. He added that he is “absolutely collaborating” with Buffett on the investments. Abel reiterates core Berkshire principles Abel affirmed core investment and operational principles long touted by his predecessor Buffett. Cash held in U.S. Treasurys, financial independence, flexibility in capital allocation, tax efficiency, and an aversion to the “ABCs” of arrogance, bureaucracy and complacency remain top priorities for Berkshire, Abel told investors. “We’ve heard many times: the ABCs – the arrogance, bureaucracy, complacency that can creep into a company – will kill a company, and we intend to never allow that to happen,” Abel said. Abel described Berkshire as “unique” in its ability to combine many different types of business while also being able to deploy capital quickly and flexibly. “Berkshire is a conglomerate, and we recognize that. But we are a unique conglomerate in that we can move our capital very efficiently,” he said. “We can move it from insurance to non-insurance, into equities, or if we so choose, to hold it in cash.” Abel says Buffett deepfake highlights cyber risks Abel said the deepfake of Buffett underscores the artificial intelligence-driven cybersecurity risk that Berkshire is facing. “It’s a great reminder for our team,” Abel said. “That is a significant risk across Berkshire that we’re managing every day.” Abel said Berkshire aims to use technology to identify cyber threats, specifically within its insurance business. The Buffett deepfake was made with no input from the actual Oracle of Omaha, Abel noted. ‘We do not intend to be beholden to anyone,’ Abel says Abel started the Q&A session with a response to question from a deepfake Warren Buffett, who asked why investors should hold onto their Berkshire stock. In his answer, Abel highlighted the strength of the firm’s cash hoard of $397 billion, which gives the firm freedom of movement. “We have our cash and U.S. Treasurys. It serves a couple purposes,” Abel told “Warren from Omaha.” “We do not intend to be beholden to anyone.” Unexpected AI lesson from Deepfake Buffett video Shareholders got an unexpected lesson in artificial intelligence risks during the annual meeting, when Abel opened the Q&A session with a seemingly familiar face. A video played on the arena screens showed Buffett, dressed in a suit, introducing himself and posing a question to Abel about why investors should continue holding Berkshire shares for the long term. “Hi, my name is Warren and I’m from Omaha,” the video began. “Greg, I’ve been watching this company for a while, long time, a very long time ... my question is a simple one. I’m 95 years old. I’ve got nothing but time and cherry Coke. And I want to know, just so I have something to tell my fellow shareholders. Why should they hold their Berkshire shares for the long term?” Abel later revealed the clip was not real, but generated using AI to make a so-called deepfake. He used the moment to highlight cyber risks. Clayton impacted by high interest rates Manufactured homebuilder Clayton Homes took a hit as potential buyers grappled with pressures such as high mortgage rates, Abel said. “That’s obviously driven by where interest rates are,” he said. There are also “certain other challenges for the consumer.” Abel said the company has a goal of delivering an “affordable home to the American consumer,” drawing attendee applause. Hyperscalers have to ‘bear the full cost’ of energy they use, Abel says Berkshire’s CEO Greg Abel said it is important to sequester the energy use costs of data centers away from grid consumers and make sure they’re being billed to the businesses demanding the electricity. “The hyperscalers, the data centers, and the users of energy – they have to bear the full cost,” he said. The pressures that data centers are putting on regional electrical grids has been a point of focus for many environmental and consumer advocacy groups during the AI boom. “As data centers expand nationwide, utilities are receiving hundreds of gigawatts in interconnection requests, necessitating significant infrastructure investments,” the Environmental and Energy Study Institute, a policy group, concluded in a February analysis. “Electricity bills are spiking for many households, contributing to an affordability crisis.” Abel sees big growth for utilities on data center buildouts Data center buildouts and the demand they’re placing on energy grids are spelling big growth opportunities for utilities, Berkshire CEO Greg Abel said. Energy demands are far short of peak load capacities, Abel said, referring to hyperscaler buildouts in Iowa. “If I look at our peak load, i.e., the amount of energy being used from those data centers, it’s at 8% … [People in the industry] want to get to 5% to 10%, and we’re already at 8% [so] we see opportunities to grow that by 50% over the next five years or potentially more,” he said. ‘We’re not going to do AI for the sake of AI,’ Abel says Abel said Berkshire has taken a reserved stance on using and managing artificial intelligence, a stark contrast from other chief executives racing to reorient or rebrand their businesses around the technology. “It has to be additive to our businesses,” Abel said. “We’re not going to do AI for the sake of AI.” Abel said Berkshire will deploy AI in a form that is narrow in scope and focused on creating value propositions. He said there’s risks for “humanity” tied to the technology that the conglomerate is keeping in mind. Companies including Snap and Atlassian cited AI when announcing job cuts this year. Allbirds last month announced a pivot to the technology from sustainable shoe production last month, prompting a surge in its stock. Buffett praises Apple CEO Tim Cook during opening remarks Warren Buffett told exiting Apple CEO Tim Cook to take a bow during his initial address to the conference, remarks that resonated with Berkshire’s own change of leadership from Buffett to new CEO Greg Abel. Buffett talked about the pressure of taking the reins from Apple founder Steve Jobs and how Cook delivered in spite of it. “How would you like to step into the shoes of Steve [Jobs] and come through his record? It’s one of the miracles of American business management. … Thank you, Tim,” Buffett said through applause. Cook announced this month that he will be stepping down as CEO, with Apple hardware chief, John Ternus, as his successor. “When Steve died and when we made our investment and turned over 10% of the resources of Berkshire, we were turning it over to Tim, and he has turned that into $185 billion or something pretax.” Buffett praises Abel, calls CEO choice ’100% successful’ Warren Buffett spoke from his seat, taking the microphone to once again praise Greg Abel. He noted that the day marks the anniversary of when he announced Abel would become CEO. “We couldn’t have made a better decision. that’s been 100% successful. [He’s doing] everything I did and then some. He’s the right person,” Buffett said. Warren Buffett’s jersey raised to rafters Berkshire Hathaway CEO Greg Abel kicked off the annual meeting by raising Warren Buffett’s jersey to the rafters at the CHI Health Center, emblazoned with the number “60,” as a permanent commemoration of the Oracle of Omaha’s many years at the conglomerate. Retiring a jersey is a tradition considered the highest honor among sports athletes. The jersey was hung in the rafters alongside Charlie Munger’s jersey, with the number “45” for the late investor’s tenure at the company. “I’m happy to report the jerseys will be in the rafters for the years to come,” Abel said. Opening video pays tribute to Buffett Berkshire’s annual meeting kicked off with an homage to Buffett. A video montage highlighted pictures and videos of the Oracle of Omaha over the years. The video, which was set to the Huey Lewis & The News song