Warren Buffett has done it again. This time it seems like it may be an accident, but who really knows how his genius works.
The Oracle of Omaha, now 96, stepped down as Berkshire Hathaway’s chairman last week, with a track record of investing in mundane industries like insurance, railroads and utilities. They don’t have the flash of the big AI companies like OpenAI and Anthropic, but turns out it didn’t matter. The real AI windfall is coming from somewhere nobody would guess: power companies.
In 2000, Berkshire bought MidAmerican Energy, a utility serving Iowa and the Midwest, with zero thought of artificial intelligence. Today, Iowa is a major data center hub, and AI’s massive appetite for electricity has turned that decades-old deal into one of Berkshire’s sharpest AI plays. “Sometimes in business, boring is what makes the most consistent profits,” Ken Mahoney, president and CEO of Mahoney Asset Management, told CNN.
It gets better. Berkshire’s 2016 purchase of Precision Castparts, a manufacturer of turbine components, went so badly that Buffett admitted he’d paid “too much,” forcing an $11 billion write-down. Now turbines are one of the industry’s biggest bottlenecks for powering data centers.
None of this was planned. “There was no talk of leveraging AI as part of this strategy,” says Cathy Seifert of CFRA Research. “This was a little bit of luck and good fortune.”
Warren Buffett has done it again. This time it seems like it may be an accident, but who really knows how his genius works.
The Oracle of Omaha, now 96, stepped down as Berkshire Hathaway’s chairman last week, with a track record of investing in mundane industries like insurance, railroads and utilities. They don’t have the flash of the big AI companies like OpenAI and Anthropic, but turns out it didn’t matter. The real AI windfall is coming from somewhere nobody would guess: power companies.
In 2000, Berkshire bought MidAmerican Energy, a utility serving Iowa and the Midwest, with zero thought of artificial intelligence. Today, Iowa is a major data center hub, and AI’s massive appetite for electricity has turned that decades-old deal into one of Berkshire’s sharpest AI plays. “Sometimes in business, boring is what makes the most consistent profits,” Ken Mahoney, president and CEO of Mahoney Asset Management, told CNN.
It gets better. Berkshire’s 2016 purchase of Precision Castparts, a manufacturer of turbine components, went so badly that Buffett admitted he’d paid “too much,” forcing an $11 billion write-down. Now turbines are one of the industry’s biggest bottlenecks for powering data centers.
None of this was planned. “There was no talk of leveraging AI as part of this strategy,” says Cathy Seifert of CFRA Research. “This was a little bit of luck and good fortune.”