Warren Buffett, the investing heavyweight and chair of Berkshire Hathaway, has for the first time revealed that he personally led the investment in Alphabet, Google's parent company.
On the 18th (local time), Buffett said in an interview with U.S. broadcaster CNBC that when asked who led Berkshire Hathaway's purchase of Alphabet shares, "I proposed it first and got it started." Until now, the market had viewed the investment as the first major decision made solely by Greg Abel, the chief executive officer (CEO) named as his successor.
Berkshire Hathaway has steadily increased its stake since disclosing that it first bought Alphabet shares in the third quarter of last year and now holds about $31 billion in equity (about 43 trillion won). In particular, earlier this year it also contributed funds to a $10 billion private capital raise carried out by Alphabet to expand its artificial intelligence (AI) infrastructure.
Buffett also again expressed regret over missing the chance to invest during Google's early growth. He said, "It was a mistake not to invest in Google in the past because it was an asset-light business," adding, "Alphabet is a company with a higher likelihood of success than 90–95% of the corporations traded on Wall Street."
Even so, he pushed back on the notion that Alphabet is Berkshire Hathaway's biggest investment. "If you look only at listed shares, it might seem that way, but we also evaluate businesses we own 100%," he said. "The value of BNSF Railway is far larger than our equity in Alphabet."
He also said, "Whether we buy listed shares or acquire an entire company, the judgment criteria are the same," explaining, "What matters is buying a good business at a reasonable price and meeting excellent management."
On the AI investment race, he said, "Microsoft, Amazon, and Meta have no choice. Right now, everyone has to play this game," while adding, "In the end, the winners will be the corporations that maintain high returns on capital." He continued, "There has never been a case where railway corporations invested $200–300 billion. AI is no longer an asset-light business."