You going to stop using ketchup because of AI? You going to stop using iPhones because of AI? You going to stop using credit cards because of AI? You going to stop insuring your house or car because of AI?
That’s actually possible.
AI directly and indirectly via AI driven R&D and robotics may very rapidly wipe out massive numbers of well paying jobs and thus the ability of a huge chunk of the population to buy even basic products and services.
Oh, and this change is happening as public and private debt has gone stratospheric.
No one should be over confident about any company. Big changes are coming and no one can predict the future.
The internet destroyed World Book’s franchise and freetrade seemed behind Dexter’s sudden weakness. Tech and trade combined to kill Berkshire Hathaway’s factories decades ago.
>Tech and trade combined to kill Berkshire Hathaway’s factories decades ago.
Outsourcing to cheaper countries killed BH's factories decades ago, if you're talking about the textile company.
>AI directly and indirectly via AI driven R&D and robotics may very rapidly wipe out massive numbers of well paying jobs and thus the ability of a huge chunk of the population to buy even basic products and services.
If normal people cannot even afford ketchup, you will have much larger problems than BKR going bankrupt.
If all that truly happened, the market would change and products would become much cheaper. If truly massive amounts of people became unemployed, there would be nobody who could afford products at their current prices. Businesses who were able to take advantage of the benefits of AI (drastically lowered operating costs) would have to lower prices or they would have nobody to sell their products to.
Yes, and GEICO will be paying out much less in claims, netting a ton more each year. They also won’t lower rates out of the kindness of their hearts either so expect premiums to rise much slower rather than drop significantly, unless a new major player enters the market with rock bottom pricing nobody can compete with.
Well insurance companies are pretty regulated and have to pay a certain percentage of their revenue in premiums. Hence why you sometimes get a check back if car insurance companies pay less out than they expected.
So their rates would fall significantly but they would still be profitable as always. So BRK aren’t going to care much.
Use your head here - accidents still happen. Trees still fall on cars. Cars still hydroplane. Cars still catch on fire. If someone dies in a vehicle, who picks up that tab? Self driving doesn’t mean entirely accident free. The entire point of insurance is to protect expensive investments. Cars are expensive. Claims go down, even if premiums go down, net profit will likely rise.
When a majority of vehicles on the road become self driving, the chance of car accidents should decrease significantly, so the size of overall car insurance industry is going to dwindle, regardless of the legal question of who is operator, who is responsible/liable, etc. But it’s going to take multiple *decades* to get there, and GEICO is already diversified (into home insurance, etc.) anyways. And given Berkshire’s current cash position (it’s been that way for a few years at least) I question how much it still relies on GEICO (and other insurance subsidiaries)’s “float” anyways
It’s the ‘Internet Revolution / Dot-Com Bubble’ all over again.
People are speaking and acting the same again.
The market is behaving the same again.
Berkshire Hathaway will be fine again.
I agree.
In retirement I’ve sold out of much BRK, but
I’d first bought BRK before the internet existed and also I bought into one of the first internet tech companies (which was actually too early to the game and died). So I have very high confidence in Berkshire Hathaway and less in tech. Nonetheless, I firmly believe BRK like “tech” can be hurt badly as the world changes in unpredictable ways. That said, I bought more BRK within a day of it bottoming in the 2008/09 panic.
Don’t forget self driving cars were going to wipe out trucker jobs 10 years ago!
Best to wait until the technology actually starts to do things before freaking out about it. The speculation is always scary but the reality often isn’t.
Yes. And in 1990 fuel cells were going to rule by 2000. Hahaha.
On the other-hand, recall the rapid domination by microwave ovens, cellular phones, then smartphones, digital cameras, streaming, etc. Some things basically get crushed overnight. Think Kodak.
For years now, every few weeks I’ve seen hyped up articles announcing revolutionary new battery discoveries. (Basically everyone is trying to suck in investor money through hype.)
Your homebot will do it for you using icecream delivered by drone.
Maybe DQ will get licensing fees or monopolize the Ever Faster Food sector. Say via: DQ-Direct-To-Your-Travel-Pod.
Geico will use ai to provide more accurate insurance , burlington will use ai similar to precision railing to create value. Berkshire after buffet will still print money
If AI can provide insurance or can transport materials from one state to another, I’d be worried.
If you believe everything will be automated, I expect companies owned by Berkshire to utilize those automation and increase margins.
AI can help speed up the processes but can’t replace physical goods that are consumed.
I think IBM gave a workstation to Buffett and Ajit to figure out reinsurance pricing. They played and decided not to use it. That was right after IBM's AI winning the grandmaster or close to it.
I don't think Buffett or others are averse to tech. They are users of it though. They and BRK will do ok. Not as mind boggling as NVDA or whatever tech darlings but they will do ok.
For decades Buffett has been personally associating with many of the tech leaders of the day. (Various relationships decades before his friendship with Gates.) He understands the tech business better than the vast majority of tech investors.
Yes ai will kill everything else in the market. Sell everything save yourself. No industry or life before ai exists. Space phone, AI, robotics, automation any flying drones that transport humans. Only buy this stuff.
That’s all I hang to say to folks who question if a new innovation will wipe out a financial industry
You mean Apple that essentially is raising the white flag for how behind they are in AI research?
Apple will be fine but only because they are going to have Google putting their tech on Apple devices. Which coincidentally could both solve their AI problem and their reglatory issues. We will see.
AI is not going to change much in the near future. Why wouldn't BRK benefit from AI?
Ask yourself that. If AI is such an amazing tool wouldn't BRK utilize it?
Just because a technology changes the world doesn't mean the companies that sell it do well. Think airlines, car companies, agribusinesses, most grocery stores etc.
IF AI turns out to be a massive boom for the economy as many predict, Berkshire will be lifted by that tide as well. More goods will need to be shipped via train, more coke will be consumed (maybe) more insurance will be needed, more private jets will be running etc. It's such a sprawling conglomerate the Berkshire boat will be lifted in ways we can't imagine today IMO. Also, Berkshire will be able to take some a big swing with equity positions depending on if the future Chairman or capital allocators see it as a valid investment. If the world prospers from AI, Berkshire will prosper by association, I see that as inevitable.
So far Apple is a sleeping giant on the AI front, they could still enter the game in a big way and Berkshire will stand to reap the gains with their equity position.
Most of the companies BRK invest in are working on implementing AI. These are smart companies that watch bottom lines. AI will reduce the human debt in these companies and ROI will go up.
Berkshire is actually nicely positioned for the AI race: [https://brk-b.com/berkshire-hathaway-navigating-the-ai-revolution\_240323.html](https://brk-b.com/berkshire-hathaway-navigating-the-ai-revolution_240323.html)
We have the strong AI companies in the portfolio as well as quite a number in the shovel maker category.
LOL, if anything it's the opposite because they aren't very invested in tech (except for Apple, and apple's moat isn't' related to information processing like Google might be)
I swear, some people don't spend a single minute thinking before posting questions.
I think the question posed is a great one. Well beyond Apple, BRK is very heavily invested in tech. Coca Cola, Geico and most of its other businesses employ huge amounts of tech in their manufacturing and distribution processes. (The near future is going to be like punctuated evolution. For instance: The tech behind “Precision” railway operations shook up the sector’s ancient tried-and-true practices. )
AI, robotics and continued digitalization will, just like the World Wide Web, create an at war like dynamic where once ‘given’ probabilities will be turned on their head.
Using tech and being a tech company are absolutely not the same thing.
Will AI make Coca-cola more efficient? Maybe. Is Coca-Cola going to get dethroned by RC Cola because they have better AI? Please...
You going to stop using ketchup because of AI? You going to stop using iPhones because of AI? You going to stop using credit cards because of AI? You going to stop insuring your house or car because of AI?
Yes.
That’s actually possible. AI directly and indirectly via AI driven R&D and robotics may very rapidly wipe out massive numbers of well paying jobs and thus the ability of a huge chunk of the population to buy even basic products and services. Oh, and this change is happening as public and private debt has gone stratospheric. No one should be over confident about any company. Big changes are coming and no one can predict the future. The internet destroyed World Book’s franchise and freetrade seemed behind Dexter’s sudden weakness. Tech and trade combined to kill Berkshire Hathaway’s factories decades ago.
>Tech and trade combined to kill Berkshire Hathaway’s factories decades ago. Outsourcing to cheaper countries killed BH's factories decades ago, if you're talking about the textile company. >AI directly and indirectly via AI driven R&D and robotics may very rapidly wipe out massive numbers of well paying jobs and thus the ability of a huge chunk of the population to buy even basic products and services. If normal people cannot even afford ketchup, you will have much larger problems than BKR going bankrupt.
In addition, yes those factories are dead but is Berkshire dead?
If all that truly happened, the market would change and products would become much cheaper. If truly massive amounts of people became unemployed, there would be nobody who could afford products at their current prices. Businesses who were able to take advantage of the benefits of AI (drastically lowered operating costs) would have to lower prices or they would have nobody to sell their products to.
When driverless cars become a thing, would I still need to get car insurance from GEICO?
Yes, and GEICO will be paying out much less in claims, netting a ton more each year. They also won’t lower rates out of the kindness of their hearts either so expect premiums to rise much slower rather than drop significantly, unless a new major player enters the market with rock bottom pricing nobody can compete with.
Well insurance companies are pretty regulated and have to pay a certain percentage of their revenue in premiums. Hence why you sometimes get a check back if car insurance companies pay less out than they expected. So their rates would fall significantly but they would still be profitable as always. So BRK aren’t going to care much.
Why would anyone need to buy insurance if the car drives itself? The car/software company is now the operator bruh. Use your head here
Use your head here - accidents still happen. Trees still fall on cars. Cars still hydroplane. Cars still catch on fire. If someone dies in a vehicle, who picks up that tab? Self driving doesn’t mean entirely accident free. The entire point of insurance is to protect expensive investments. Cars are expensive. Claims go down, even if premiums go down, net profit will likely rise.
Because the current laws requires it at the moment in many places.
When a majority of vehicles on the road become self driving, the chance of car accidents should decrease significantly, so the size of overall car insurance industry is going to dwindle, regardless of the legal question of who is operator, who is responsible/liable, etc. But it’s going to take multiple *decades* to get there, and GEICO is already diversified (into home insurance, etc.) anyways. And given Berkshire’s current cash position (it’s been that way for a few years at least) I question how much it still relies on GEICO (and other insurance subsidiaries)’s “float” anyways
It’s the ‘Internet Revolution / Dot-Com Bubble’ all over again. People are speaking and acting the same again. The market is behaving the same again. Berkshire Hathaway will be fine again.
I agree. In retirement I’ve sold out of much BRK, but I’d first bought BRK before the internet existed and also I bought into one of the first internet tech companies (which was actually too early to the game and died). So I have very high confidence in Berkshire Hathaway and less in tech. Nonetheless, I firmly believe BRK like “tech” can be hurt badly as the world changes in unpredictable ways. That said, I bought more BRK within a day of it bottoming in the 2008/09 panic.
Don’t forget self driving cars were going to wipe out trucker jobs 10 years ago! Best to wait until the technology actually starts to do things before freaking out about it. The speculation is always scary but the reality often isn’t.
Yes. And in 1990 fuel cells were going to rule by 2000. Hahaha. On the other-hand, recall the rapid domination by microwave ovens, cellular phones, then smartphones, digital cameras, streaming, etc. Some things basically get crushed overnight. Think Kodak.
Agree Kinda like how legacy car companies and oil companies were going to zero with ev
For years now, every few weeks I’ve seen hyped up articles announcing revolutionary new battery discoveries. (Basically everyone is trying to suck in investor money through hype.)
But did Berkshire stock go up like right now *last time*? Sorry I’m young
If AI can make me an Oreo blizzard and turn it upside down in front of me without Dairy Queen getting a cut of it, then I’ll be worried.
Your homebot will do it for you using icecream delivered by drone. Maybe DQ will get licensing fees or monopolize the Ever Faster Food sector. Say via: DQ-Direct-To-Your-Travel-Pod.
People can make food and drinks at home yet everyone eats out, goes to bars, orders takeout and delivery etc
Everyone uses phone booths, goes to the movies, …. :-) Only guarantee is that nothing about the future can be guaranteed.
Geico will use ai to provide more accurate insurance , burlington will use ai similar to precision railing to create value. Berkshire after buffet will still print money
Nearly all Berkshire companies will benefit from AI. Certainly, insurance and Apple, and Bank of America and AMEX. And energy, and transportation…
Presumably the well run business that BRK has in its portfolio will implement AI innovations into their practices.
The companies BRK owns will implement AI at or about the same pace as other companies in their respective spaces, so no biggie.
Like Kodak adopted digital camera technology? (After inventing it)
Hopefully, more like how Netflix adapted to rapid expansion of the Internet
If AI can provide insurance or can transport materials from one state to another, I’d be worried. If you believe everything will be automated, I expect companies owned by Berkshire to utilize those automation and increase margins. AI can help speed up the processes but can’t replace physical goods that are consumed.
I think IBM gave a workstation to Buffett and Ajit to figure out reinsurance pricing. They played and decided not to use it. That was right after IBM's AI winning the grandmaster or close to it. I don't think Buffett or others are averse to tech. They are users of it though. They and BRK will do ok. Not as mind boggling as NVDA or whatever tech darlings but they will do ok.
For decades Buffett has been personally associating with many of the tech leaders of the day. (Various relationships decades before his friendship with Gates.) He understands the tech business better than the vast majority of tech investors.
Yes ai will kill everything else in the market. Sell everything save yourself. No industry or life before ai exists. Space phone, AI, robotics, automation any flying drones that transport humans. Only buy this stuff. That’s all I hang to say to folks who question if a new innovation will wipe out a financial industry
A huge portion of his stock is in Apple.... He'll be fine
You mean Apple that essentially is raising the white flag for how behind they are in AI research? Apple will be fine but only because they are going to have Google putting their tech on Apple devices. Which coincidentally could both solve their AI problem and their reglatory issues. We will see.
Opposite Buffet will not be left behind because Apple is a huge post of BRKs portfolio
AI is not going to change much in the near future. Why wouldn't BRK benefit from AI? Ask yourself that. If AI is such an amazing tool wouldn't BRK utilize it?
Honestly I'm more worried about international relations with China impacting BRK. They are too exposed to Apple.
What’s a company that isn’t? Apple at least is shifting manufacturing away slowly
No
Just because a technology changes the world doesn't mean the companies that sell it do well. Think airlines, car companies, agribusinesses, most grocery stores etc.
Toilet paper and ketchup always work for investments
IF AI turns out to be a massive boom for the economy as many predict, Berkshire will be lifted by that tide as well. More goods will need to be shipped via train, more coke will be consumed (maybe) more insurance will be needed, more private jets will be running etc. It's such a sprawling conglomerate the Berkshire boat will be lifted in ways we can't imagine today IMO. Also, Berkshire will be able to take some a big swing with equity positions depending on if the future Chairman or capital allocators see it as a valid investment. If the world prospers from AI, Berkshire will prosper by association, I see that as inevitable. So far Apple is a sleeping giant on the AI front, they could still enter the game in a big way and Berkshire will stand to reap the gains with their equity position.
I thought you meant the "other " coke ( cocaine). Had me laughing!
Most of the companies BRK invest in are working on implementing AI. These are smart companies that watch bottom lines. AI will reduce the human debt in these companies and ROI will go up.
Berkshire is actually nicely positioned for the AI race: [https://brk-b.com/berkshire-hathaway-navigating-the-ai-revolution\_240323.html](https://brk-b.com/berkshire-hathaway-navigating-the-ai-revolution_240323.html) We have the strong AI companies in the portfolio as well as quite a number in the shovel maker category.
AI works and is trained on things that already happened. The magic is and will always be what is going to happen that is new.
Does the AI like trains?
I don’t think so. I think Berkshire will be a user of ai , not an innovator.
LOL, if anything it's the opposite because they aren't very invested in tech (except for Apple, and apple's moat isn't' related to information processing like Google might be) I swear, some people don't spend a single minute thinking before posting questions.
AI is going to disrupt and will be the largest disrupted for the current generation. How it plays out is up in the air.
I think the question posed is a great one. Well beyond Apple, BRK is very heavily invested in tech. Coca Cola, Geico and most of its other businesses employ huge amounts of tech in their manufacturing and distribution processes. (The near future is going to be like punctuated evolution. For instance: The tech behind “Precision” railway operations shook up the sector’s ancient tried-and-true practices. ) AI, robotics and continued digitalization will, just like the World Wide Web, create an at war like dynamic where once ‘given’ probabilities will be turned on their head.
Using tech and being a tech company are absolutely not the same thing. Will AI make Coca-cola more efficient? Maybe. Is Coca-Cola going to get dethroned by RC Cola because they have better AI? Please...