Buffett reveals $31bn Alphabet bet, likens AI capex to railroads
Warren Buffett disclosed he orchestrated Berkshire Hathaway’s $31 billion investment in Alphabet, arguing that massive AI infrastructure spending has transformed the tech giant into the kind of capital-intensive business he traditionally favors.
Warren Buffett revealed he personally orchestrated Berkshire Hathaway’s $31 billion investment in Alphabet, clarifying that incoming chief executive Greg Abel was not the driving force behind the position. The disclosure sent Alphabet shares up nearly 4% on Wednesday, with the stock continuing to climb on Thursday. The rally pushed Google co-founder Larry Page’s net worth above $300 billion for just the second time, adding $8 billion to his fortune.
For decades, Buffett largely avoided technology stocks, admitting he "made a mistake" by passing on Google for years. His change of heart stems not from a new appreciation for software, but from how the artificial intelligence race has altered the financial profile of hyperscalers. Tech giants are now pouring hundreds of billions of dollars into data centers and chips.
“They weren’t playing that game with computer software,” Buffett told CNBC, noting that the capital-intensive buildout now resembles railroads and utilities. This infrastructure spending model is one Buffett has understood and profited from for decades. He estimated Alphabet is now the "number five or six" largest holding in Berkshire’s portfolio.
Despite the massive investment, Buffett framed the AI spending race as a defensive necessity rather than a clear path to victory. “They’re now playing a game, in many cases, or in some cases, where they’re playing a game they don’t want to play,” he said, drawing a parallel to IBM’s historic revenue miss this week. “They don’t have any choice.”
Alphabet is doubling its AI spending to $185 billion, a commitment that CEO Sundar Pichai acknowledged carries risks regarding compute bottlenecks. Yet Pichai struck an optimistic tone on the company’s February earnings call, stating that Google is in a “very, very relentless innovation cadence” heading into 2026.
Buffett declined to compare Alphabet directly to other Magnificent Seven peers like Amazon or Microsoft. However, he offered a rare vote of confidence for a tech stock caught in an expensive arms race, stating Alphabet is “more likely to be a winner based on the record than probably 90% or 95% of what gets merchandised through Wall Street.” Berkshire began building its position in the third quarter of 2025 and accelerated purchases last month with an additional $10 billion.
