What Warren Buffett Really Thinks of A.I. and Investing in the Tech | lpstrkl.com

What Warren Buffett Really Thinks of A.I. and Investing in the Tech

At Berkshire Hathaway (BRK.A)’s annual shareholder meeting on Saturday (May 4), the investing conglomerate’s chairman Warren Buffett shared a personal experience with artificial intelligence that made him nervous about investing in the buzzing technology.

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“Fairly recently, I saw an image in front of my screen. It was me, and it was my voice and wearing the kind of clothes I wear,” Buffett said. “My wife or my daughter wouldn’t have been able to detect any difference. And it was delivering a message that in no way it came from me.”

When asked by a shareholder about his view on investing in A.I., Buffett claimed he doesn’t “know anything about A.I.” but added that “that doesn’t mean I deny its existence.”

Reflecting on his recent encounter with the technology, the 93-year-old investor seemed concerned. “A.I. has enormous potential for good and enormous potential for harm,” he said. “When you think about the potential for scamming people…Scamming has always been part of the American scene. If I was interested in investing in scamming—it’s gonna be the growth industry of all time.”

Buffett compared the rapid development of A.I. to the emergence of nuclear weapons—of which he is a vocal opponent—echoing an analogy he’d made at last year’s shareholder meeting. “We let the genie out of the bottle when we developed nuclear weapons, and that genie has been doing some terrible things,” he said. “The power of that genie scares the hell out of me. And I don’t know of any way to get the genie back in the bottle. And A.I. is somewhat similar. It’s part of the way out of the bottle.”

Buffett is known to be cautious about investing in new technologies that he doesn’t understand, no matter how popular they seem. Berkshire Hathaway’s portfolio was oddly missing major tech holdings for years. It didn’t make its first tech bet until 2016 when acquiring some 10 million shares of Apple (AAPL). Since then, Berkshire has ramped up Apple shares to be its top position.

In recent quarters, Berkshire has unloaded millions of Apple shares. During the first three months of 2024, the value of the conglomerate’s Apple holding dropped 22 percent to about $135 billion from $174 billion, the company revealed in its first-quarter earnings on Saturday.

Still, Buffett remains bullish on Apple’s future. On Saturday, he said the iPhone is one of the greatest products of all time and that Apple is an even better stock than American Express and Coca-Cola, two of the other top holdings in Berkshire’s portfolio.

Despite Buffett’s disinterest in investing in A.I. companies, he might not be immune to the technology’s impact. At one point of Saturday’s meeting, a shareholder asked how Berkshire’s stock-picking businesses could be disrupted by A.I. Buffett predicted that the tech would affect “anything that’s labor sensitive” and “create an enormous amount of leisure time” for human workers as a result. However, he didn’t get into how A.I. could threaten job security and replace human workers in his industry.

Greg Abel, Berkshire’s head of energy businesses and Buffett’s successor apparent, added that “we’re in the early innings” of understanding the impact.

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