Change of strategy. Long resistant to technology stocks, Warren Buffett today admits to having missed a historic opportunity. The 95-year-old investor personally claims Berkshire Hathaway’s $31 billion bet on Alphabet, explaining that Google has become a very different company from the one he observed twenty years ago. For him, the artificial intelligence revolution has transformed cloud giants into highly capital-intensive companies, a model he knows by heart.
Key Points
Warren Buffett says he personally initiated Berkshire Hathaway’s $31 billion position in Alphabet, not Greg Abel Investor admits ‘a mistake’ for shunning Google and now compares hyperscalers to railroads he’s owned for decades Alphabet forecasts up to $190 billion in capex for AI in 2026, while IBM plunges 25%, its worst session since 1968 Berkshire remains sitting on a record of $397.4 billion in cash, without a single bitcoin on the balance sheet despite $850 million in missed BTC gains
Warren Buffett assumes his bet on Alphabet
Asked by CNBC, Warren Buffett wanted to set the record straight: Berkshire Hathaway’s $31 billion stake in Alphabet is indeed his initiativeand not that of Greg Abel, general manager of the conglomerate. “I was the one who initiated it. He doesn’t do anything I don’t approve of. We talk to each other all the time,” he declared, before admitting to having a long underrated Google : “I made a mistake.” Berkshire has started to build its position in the third quarter of 2025 before strengthening it in recent months. Alphabet now represents the fifth or sixth largest line in the group’s portfolio. Investors have welcomed this position : Alphabet shares rose nearly 4%, once again propelling the fortune of co-founder Larry Page above $300 billion. Mr. Buffett does not hide his optimism about the solidity of the groupwhich he considers «more likely to be a winner than probably 90% or 95% of what’s sold on Wall Street.»
Warren Buffet recognizes his mistake about Google and reverses his position against the backdrop of AI – Source: Compte
Why AI finally convinced Buffett
Buffett’s change of outlook does not reflect overwhelming enthusiasm for artificial intelligence. On the contrary, he believes that the cloud giants are engaged in an investment race from which they can no longer escape:
“The real issue with Google and all its competitors now is that they are all paying hundreds of billions of dollars. (…) This is the game they are playing now. They weren’t playing this game with software. »
Warren Buffet on AI giants – Source: CNBC
According to him, Alphabet, Microsoft, Amazon and even Meta are now more similar to railway companies and public services that Berkshire has held for decades: companies forced to invest massively in their infrastructure to preserve their dominant position. Alphabet thus plans up to 185 billion dollars in AI-related capital spending in 2026. He even describes this race as “a game they don’t want to play”, believing that these expenses have become essential to remain competitive. He cites in particular IBMrecently sanctioned on the stock market after disappointing investors, as an illustration of the risks to which companies unable to keep up with this pace are exposed. Finally, an essential nuance: Berkshire is not betting on Alphabet because AI is fashionable, but because Google hasan economic model strong enough to finance this race. Basically, Warren Buffett does not change his investment philosophy. He continues to favor companies that can generate strong cash flow and maintain a sustainable competitive advantage. If artificial intelligence is disrupting the technology sector todayit is above all Alphabet’s capacity to absorb these colossal investments which justifies, according to him, a bet of 31 billion dollars.