On May 2, Berkshire Hathaway held its annual shareholder meeting. This year’s meeting was hosted by new CEO Greg Abel, while Warren Buffett sat in the front row off the main stage in his role as chairman.

The most important themes of this meeting were the application of AI technology and the outlook for stock market investing.

AI Adoption Across the Business

Abel is actively embracing AI. Multiple business segments within Berkshire have already implemented AI, while the company is hiring engineers and technical staff at scale and retraining existing employees for new roles.

At BNSF, Berkshire’s railroad subsidiary, more than 750 trains operate daily. AI is used for predictive maintenance of locomotives and equipment, and to optimize scheduling and efficiency using 177 years of accumulated data. These applications have already contributed positively to operating performance.

In insurance, large language models and other AI tools are being applied to solve operational and logical challenges, improving efficiency.

Abel highlighted three key principles for AI deployment: keep humans involved in critical decisions, establish strong safety protections, and focus on narrow, practical AI applications rather than broad, generalized concepts. At the start of the meeting, an AI-generated imitation of Buffett asked a question, which Abel used to emphasize cybersecurity risks.

Buffett on the Market Outlook

Buffett stated that the current environment is not ideal for investing, partly because overall market valuations are high.

Although seated offstage, Buffett received continuous questions from shareholders. Berkshire’s cash reserves have reached a record high, and Buffett said the company is not eager to deploy capital aggressively at current valuations. He emphasized patience and waiting for the right opportunities.

He noted that opportunities tend to emerge when “no one is willing to pick up the phone,” signaling a preference to wait for market downturns.

Abel added that the company’s large cash position provides strong flexibility. Berkshire has identified several outstanding companies, but current valuations and risk levels are not yet attractive enough to justify action.

AI Power Demand and Energy Opportunity

Abel stated that computing demand must fully bear its electricity costs. Data centers should not pass these costs on to ordinary consumers.

AI-driven demand for electricity is creating a major growth opportunity for Berkshire’s utilities business. Data center power usage has already reached 8% of peak load in some regions and could grow by 50% or more over the next five years.

Currently, about half of Berkshire’s energy businesses are already serving AI-related demand.

AI Limits and Human Judgment

In response to questions about AI replacing humans, insurance head Ajit Jain said that while AI is useful for risk prediction, routine operations, and cost efficiency, it is not yet capable of handling complex decisions such as underwriting and claims evaluation.

Core functions like risk control and major decision-making will continue to rely on human expertise. Berkshire maintains a strict principle: AI serves as a tool, but humans retain final authority.

Impact of Middle East Conflict

Abel said the Middle East conflict has affected Berkshire’s subsidiaries in multiple ways. Rising raw material and energy costs have pressured profits, but the company has mitigated the impact through contract pricing and timing adjustments.

Some products have limited exposure to Middle Eastern markets, but contractual obligations are still being fulfilled. Employee safety and long-term operations remain the priority.

On insuring shipping through the Strait of Hormuz, Ajit Jain emphasized that pricing is the key factor. Due to the complexity and uncertainty of geopolitical risks, Berkshire has only taken a limited position and has not issued formal policies yet. The company will only proceed when pricing, risk, and terms fully meet its standards.

Why Hold Berkshire Long Term

Abel explained why shareholders should continue holding Berkshire. The company has a strong operational foundation and high-quality assets, with the insurance business as a core pillar.

Berkshire benefits from deep talent reserves and the ability to capture opportunities across economic cycles. Its non-insurance businesses provide diversified and steady investment opportunities.

The company’s large cash and U.S. Treasury holdings allow it to remain patient and deploy capital when opportunities arise. It can allocate capital efficiently across insurance, operating businesses, and equity investments, while maintaining a lean organizational structure.

Investment Strategy Going Forward

Abel emphasized that Berkshire will maintain a concentrated investment strategy. A small number of core holdings form the foundation, including Apple, American Express, Moody’s, and Coca-Cola. Large positions in Japanese trading companies are another key pillar and are intended to be held long term.

He also mentioned other important holdings such as Bank of America, Chevron, and Alphabet. Abel is taking on a more central role in managing the portfolio, making adjustments and allocation decisions in close coordination with Buffett.

Real Estate Pressure from High Rates

Abel noted that high interest rates are weighing on the housing market. Berkshire’s Clayton Homes business has been significantly affected, as higher borrowing costs increase pressure on consumers.

Despite this, the company remains committed to its mission of providing affordable housing to American families.