Berkshire Hathaway’s AI strategy now rests on two distinct pillars: a multi-billion-dollar equity position in Alphabet and a disciplined push to supply energy to data centres through Berkshire Hathaway Energy. Speaking to CNBC’s Squawk Box from Tokyo, chief executive Greg Abel laid out both bets in unusual detail, including the Sunday phone call that led to a $10 billion private placement in Google’s parent company.
The Alphabet Deal: A Sunday Call and a 6.5% Discount
Berkshire’s Alphabet position now stands at almost $36 billion, built from an initial purchase Warren Buffett made roughly 15 months before the interview and expanded substantially this spring. Abel recounted receiving an unexpected call on a Sunday morning in late May: Alphabet was planning a large equity offering and wanted to know if Berkshire would participate.
‘They hadn’t set the size but recommended that we consider 10 billion,’ Abel told host Becky Quick. He called Buffett immediately. They agreed they were ‘comfortable’ with a $10 billion purchase at a 6.5% discount, ‘and then ultimately consummated the transaction.’
The deal was one component of a larger capital raise. According to an Alphabet FWP filing with the Securities and Exchange Commission (SEC), the aggregate raise consisted of: the $10 billion Berkshire private placement; a $30 billion underwritten public offering split between depositary shares tied to mandatory convertible preferred stock and Class A and Class C common shares; and an at-the-market programme to sell up to $40 billion of Class A and Class C shares, bringing the announced aggregate to $80 billion. The underwritten portion was oversubscribed, and the Google investor presentation indicates the final raise reached approximately $84.75 billion after upsizing.
The backdrop was Alphabet’s own accelerating capital spending. Reuters reported that Alphabet had raised its annual capital expenditure forecast by $5 billion, to between $180 billion and $190 billion, ahead of the equity raise, to fund AI-driven computing demand.
Berkshire added Class C shares (GOOG) to the position in the second quarter as well, according to portfolio data from Stockzoa’s Berkshire holdings tracker, which shows approximately $8.3 billion in Class C shares added alongside the private placement. The full portfolio is disclosed in Berkshire’s 13F-HR filing, submitted to the SEC on 14 August 2026.
Abel’s rationale was deliberately high-level. From Berkshire’s own operating companies, he and Buffett could see AI was ‘going to have a significant impact on America and businesses,’ and ‘we saw Google as a significant player.’
Berkshire Hathaway AI Strategy on the Energy Side: Terms, Not Just Ambition
The second prong runs through Berkshire Hathaway Energy. Abel has long held that energy supply, not processing capacity or land, is the binding constraint on data centre expansion. In Iowa, where the utility already draws roughly 8% of its load from data centres, Abel sees room to grow, but only on specific terms.
The company will serve hyperscalers only if doing so imposes no cost increase on existing customers, and ideally delivers a net benefit. Communities must accept the facilities, and operators must address water usage through available technologies. Abel cited Iowa as a model: data centres there have provided ‘very, very substantial’ tax relief on property and revenues that flow into local schools, police, and fire departments.
He acknowledged pushback is mounting. ‘There is a lot more pushback in the communities across the U.S.,’ he said, urging data centre developers to ‘seriously evaluate’ community reaction rather than assume approval. No Berkshire energy infrastructure site has been rejected to date.
Japan: Decades, Not Quarters
Abel spoke from Tokyo, where he had visited Tungaloy, a tool-making unit in Fukushima that Berkshire acquired from Toshiba in 2008. The business employs around 1,500 people in Japan, with just under $240 million in domestic sales and a further roughly $400 million internationally.
The more consequential conversations were with the five trading houses: Itochu, Marubeni, Mitsubishi, Mitsui, and Sumitomo. Berkshire now holds more than 10% in each, having received their permission to cross that threshold. Abel said Berkshire intends to hold those positions ‘for many decades.’
Japan’s 10-year bond yield edged above 3% during his visit, its highest in 30 years, against a US 10-year yield of close to 4.8%. Abel was unmoved. None of the trading house executives raised rising rates as a ‘fundamental challenge right now,’ he said, and Berkshire plans to continue issuing yen-denominated bonds as needed.
The Tokio Marine partnership, struck in March for $1.8 billion and roughly a 2.5% stake, remains deliberately open-ended. Reuters reported that Berkshire’s National Indemnity Company purchased approximately 48.2 million treasury shares and can raise its stake to 9.9% through open-market purchases without needing prior board approval. Investing.com reported that Tokio Marine planned to repurchase up to ¥287.4 billion of its own shares to offset dilution, funded by proceeds from the share allotment. Abel declined to comment on reports linking the partnership to potential acquisitions of overseas insurers, saying only: ‘There’s no obligation to act on it. But if it were to make sense, both for Tokio Marine and for ourselves, of course, we’d love to pursue a transaction with them.’
On housing, Abel sees a ‘bumpy road for a while’ before the recently acquired Taylor Morrison becomes a ‘very strong asset’ in five to ten years. Berkshire closed out the second quarter with $365.5 billion in cash and repurchased $4.5 billion of its own shares during the period. The next test is whether Abel’s energy-infrastructure terms are strict enough to keep regulators and communities on side as the data centre pipeline grows.
