Warren Buffett is worried, and he wants investors to know it. The legendary investor used a rare interview with CNBC this week to call out what he sees as reckless speculation in financial markets and the staggering cost of the artificial intelligence buildout. “It’s tough to find values when everybody is preferring gambling,” said the famously disciplined bargain hunter, who stepped down as CEO of Berkshire Hathaway at the start of the year but remains its chairman at age ninety-five. Buffett said it has been hard to find good deals for years because the market has shifted decisively in favor of speculators, noting that humans love to gamble so much that there is more money in cultivating gamblers than in cultivating investors.
Buffett also zeroed in on the enormous sums being poured into AI infrastructure by hyperscalers such as Meta, Microsoft, and Alphabet, which are collectively spending hundreds of billions of dollars on microchips, data centers, and other equipment in a race to dominate the technology. “That’s real money,” he said. “That’s the game they’re playing now. They weren’t playing that game with computer software.” Several of Buffett’s close followers said those huge outlays appear to trouble him because they are eroding cash flows that previously funded stock buybacks, forcing companies to raise outside capital and raising the possibility that they could spend lavishly with little to show for it.
Yet even amid his caution, Buffett has been quietly making moves of his own. Berkshire ramped up a position in Alphabet last year to nearly fifty-eight million shares and then invested another ten billion dollars in the company through a private placement in June, bringing the total wager to roughly thirty-one billion dollars and making Alphabet the third-largest holding in Berkshire’s portfolio after Apple and American Express. Buffett told CNBC that Alphabet is more likely to be a winner than ninety percent or ninety-five percent of what gets merchandised through Wall Street, though some followers admitted confusion about how his investment squares with his concerns about AI spending returns.
Whatever Buffett sees in Alphabet, one message came through clearly: he is picking his spots with extraordinary care in a red-hot market, and signaling that others would be wise to do the same. With Berkshire sitting on a record three hundred eighty billion dollar cash pile at the end of March, some observers noted that his extreme caution has kept him from fully capitalizing on a sharply rising equity market over the past few years — but that has always been part of the approach for an investor who has built his reputation on patience, discipline, and waiting for the right pitch.