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Buffett’s “we should’ve bought Google” era gets a sequel
Warren Buffett and Charlie Munger spent years joking that missing Google was one of Berkshire’s bigger facepalm moments. Now Berkshire Hathaway is doing something about it: Alphabet says Berkshire will invest another $10 billion in the company through a private stock purchase.
That’s not pocket change, even for a conglomerate that treats cash like a hobby. The deal includes $5 billion of Alphabet’s Class A shares at $351.81 each and another $5 billion of Class C shares at $348.20 each. In other words, Berkshire isn’t nibbling. It’s loading up.
Why this matters: AI is eating the budget
Alphabet also said the broader $80 billion stock sale will help fund capital spending tied to AI infrastructure and rising computing demand. Translation: the AI arms race is so expensive that even one of the biggest cash machines on Earth wants a bigger war chest.
That’s the part investors should watch. Alphabet is telling you, out loud, that the next leg of the business is going to require serious capex. If the spending pays off, the company gets stronger positioning in AI and cloud. If it doesn’t, well, that’s a lot of cash to feed the machine.
Buffett’s old regret, now with interest
At Berkshire’s 2019 annual meeting, Buffett and Munger basically admitted they watched Google’s advertising power up close through Geico and still failed to move fast enough. This time, Berkshire is buying into the story instead of admiring it from the sidelines.
Big picture: Berkshire’s move is a giant vote of confidence in Alphabet’s AI future — and a reminder that even “too late” can still be early if the secular trend is big enough.