Warren Buffett: I initiated Berkshire Hathaway's investment in Alphabet

WELCOME BACK EVERYBODY.

BERKSHIRE HATHAWAY NOW HOLDS A MORE THAN $31 BILLION STAKE IN ALPHABET. THAT'S A POSITION

ALPHABET. THAT'S A POSITION THAT THE CONGLOMERATE STARTED TO BUILD IN THE THIRD QUARTER OF 2025. BUT IT REALLY RAMPED

OF 2025. BUT IT REALLY RAMPED UP THIS YEAR AFTER GREG ABEL TOOK OVER AS CEO OF BERKSHIRE.

IN FACT, JUST LAST MONTH, IT ADDED $10 BILLION AS PART OF A PRIVATE STOCK PURCHASE OF THOSE ALPHABET SHARES. NOW, THERE'S

ALPHABET SHARES. NOW, THERE'S BEEN A LOT OF SPECULATION AS TO WHO DECIDED TO TO PURCHASE THOSE SHARES, WITH MANY POINTING TO THE STAKE AS A SIGN OF HOW GREG ABEL WILL BE PUTTING HIS MARK ON THE

BERKSHIRE PORTFOLIO. I ASKED

BERKSHIRE PORTFOLIO. I ASKED BUFFETT, WHOSE IDEA IT WAS TO BUY THE TECH GIANT.

I INITIATED. I MEAN, I NORMALLY WOULDN'T GIVE YOU AN ANSWER ON SOMETHING LIKE THAT, BUT I WILL BECAUSE IT. AND. BUT

WE I AM NOT DOING ANYTHING THAT HE DOESN'T APPROVE OF. HE'S NOT

DOING ANYTHING I DON'T APPROVE OF. WE TALK ALL THE TIME. HE'S

OF. WE TALK ALL THE TIME. HE'S

YOU KNOW, HE'S. WELL EVERY DAY.

I MEAN, AND BUT HE IS THE DECIDER. AND. GETTING BACK TO

DECIDER. AND. GETTING BACK TO ALPHABET OR GOOGLE, IT'S PROBABLY NUMBER 5 OR 6.

I THOUGHT IT WAS NUMBER THREE. IF YOU CONSIDER THE $10

THREE. IF YOU CONSIDER THE $10 BILLION PRIVATE PLACEMENT THAT WOULD GO ALONG WITH THAT, BECAUSE THAT WOULD PUT IT NORTH OF $31 BILLION.

YEAH. BUT WE WE'VE GOT WE'VE GOT THE BURLINGTON NORTHERN RAILROAD, WHICH IS CERTAINLY WORTH FAR MORE MONEY.

OKAY. SO YOU'RE YOU'RE COUNTING FULLY.

OWNED AS WELL. I MEAN, WE ARE ALWAYS MAKING THE CHOICE BETWEEN WHETHER WE'LL BUY MARKETABLE SECURITIES. WE LOOK

MARKETABLE SECURITIES. WE LOOK AT THEM THE SAME WAY. THERE'S

THERE ARE SOME MINOR EXCEPTIONS TO THAT. WE CAN'T WE CAN'T SET

TO THAT. WE CAN'T WE CAN'T SET DIVIDEND POLICY, FOR EXAMPLE, IF WE DON'T OWN IT. BUT THE

CHANCES OF THOSE BEING MATERIAL.

THE IMPORTANT THING IS TO BUY A GOOD BUSINESS AND TO BUY IT ON THE RIGHT TERMS, AND THEN GET THE RIGHT PERSON TO RUN IT.

OKAY, BUT YOU'VE QUICKLY GROWN NORTH OF $30 BILLION INVESTMENT IN ALPHABET. THAT

PUTS IT IN TERMS OF THOSE COMPANIES THAT YOU OWN PIECES OF. BEHIND ONLY APPLE AND.

OF. BEHIND ONLY APPLE AND.

AMERICAN EXPRESS. AMERICAN

EXPRESS. SO COCA-COLA WOULD BE SMALLER. BANK OF AMERICA WOULD

SMALLER. BANK OF AMERICA WOULD BE.

IT'S KIND OF CLOSE. AND IT.

BUT. BUT IF YOU TAKE COCA COLA, WHICH WE'VE OWNED, YOU KNOW, 45 YEARS, WHATEVER IT MAY BE, YOU

KNOW, WE, WE, WE DON'T HAVE A THING TO DO WITH RUNNING THAT BUSINESS. AND, BUT IT'S A VERY

BUSINESS. AND, BUT IT'S A VERY GOOD BUSINESS. AND I WHEN I SAY

GOOD BUSINESS. AND I WHEN I SAY A VERY GOOD BUSINESS, I MEAN SOMETHING THAT YOU CAN EXPECT TO OWN, EARN HIGH RETURNS ON CAPITAL OVER A LONG PERIOD OF

TIME. NOW, THE QUESTION IS,

TIME. NOW, THE QUESTION IS, WHEN YOU GET INTO GOOGLE IS OR ANY OF THE AI COMPANIES, YOU'RE PUTTING OUT A HUGE AMOUNTS OF MONEY, AND I CAN PUT HUGE AMOUNTS OF MONEY INTO

GOVERNMENT BONDS THAT GET, YOU KNOW, 20 OR 30 OR $40 BILLION A YEAR IN TERMS OF PAYMENTS PROBLEM. SO A GOOD BUSINESS IS

PROBLEM. SO A GOOD BUSINESS IS ONE THAT EARNS IT A LOT MORE THAN, THAN, THAN, AND HAS PROSPECTS OF CONTINUING TO EARN

A LOT MORE THAN THE, THE RETURNS ON, ON, ON ESSENTIALLY RISKLESS INVESTMENTS, WHICH YOU COULD DEFINE AS TREASURIES. BUT

IF YOU TAKE SOMETHING LIKE AMERICAN EXPRESS, YOU KNOW, THERE ARE MOST OF THE BANKS

EARN 13, 14% ON, ON, ON CAPITAL.

IF I ASKED EVERYBODY TO GUESS WHAT AMERICAN EXPRESS WOULD, THEY WOULD THEY WOULD THEY WOULD COME UP WITH SOME FIGURE SIMILAR. BUT IT'S SO DIFFERENT

SIMILAR. BUT IT'S SO DIFFERENT THAT IT EARNS 30% PLUS ON CAPITAL AND DOES NOT INCUR MORE RISK IN DOING SO THAN THE BANKS

THAT EARN 13 OR 14%. AND THAT

THE TRICK IN LIFE IS TO FIND, I MEAN, INVESTING IS TO FIND BUSINESSES THAT ARE GOING TO EARN HIGH RETURNS ON CAPITAL FOR AN EXTENDED PERIOD OF TIME.

AND THAT'S WHAT HAPPENED WITH WITH BERKSHIRE FOR A LONG PERIOD OF TIME. A LONG PERIOD OF TIME GETS TO BE VERY IMPORTANT BECAUSE THOSE DOUBLES LATER ON A VERY BIG NUMBERS.

BUT CHARLIE, CHARLIE MUNGER, MY MY PARTNER FOR MANY, FOR DECADES, HE JUST HE JUST POUNDED THE IDEA THAT IT WASN'T

A GOOD BUSINESS JUST BECAUSE IT, IT WAS DOING SEXY THINGS OR WHATEVER IT MIGHT BE. BUT IF IT WASN'T EARNING REAL CASH, THAT

IT WOULD OR BE EXPECTED TO DO IT IN A VERY SHORT PERIOD OF TIME AND BE ABLE TO DISTRIBUTE IT IF IT WANTED TO. BETTER YET,

IF IT COULD REEMPLOY IT AS A BUSINESS, IT WAS EVEN BETTER THAN ONE THAT HAD HAD THE ABILITY TO EARN HIGH RETURNS, BUT YOU COULDN'T DEPLOY THE

EXCESS CAPITAL OF THOSE RETURNS.

OKAY. LET ME ASK YOU THOUGH, FOREVER, PEOPLE HAVE THOUGHT OF YOU AS SOMEBODY WHO DOESN'T INVEST IN TECHNOLOGY. AND BY

THE WAY, YOU'VE DESCRIBED YOURSELF AS SOMEBODY WHO DOESN'T INVEST IN TECHNOLOGY.

OBVIOUSLY, THE BIGGEST POSITION IN THE BERKSHIRE PORTFOLIO IS APPLE, A POSITION THAT YOU PUT ON. BUT AT THE TIME YOU CALLED

ON. BUT AT THE TIME YOU CALLED THAT A CONSUMER COMPANY, GOOGLE, YOU JUST CALLED AN AI COMPANY.

SO WHAT HAPPENED?

GOOGLE THE REAL QUESTION WITH GOOGLE AND ALL OF ITS COMPETITORS NOW, BECAUSE THEY'RE ALL LAYING OUT HUNDREDS OF BILLIONS. I MEAN.

OF BILLIONS. I MEAN.

THEY'RE BIG CAP SPENDERS.

YEAH. AND THAT'S REAL MONEY.

I MEAN, IT'S OUR RAILROAD WERE TO LAY OUT 300 MILLION OR BILLION OR 200 BILLION. YOU

KNOW, THAT THAT KIND OF MONEY WASN'T EVEN PUT IN THE RAILROAD BUSINESS, YOU KNOW, IN TERMS OF DEVELOPING IT. SO AND THEY ARE

DEVELOPING IT. SO AND THEY ARE THAT'S THE GAME THEY'RE PLAYING NOW. THEY WEREN'T PLAYING THAT

NOW. THEY WEREN'T PLAYING THAT GAME WITH WITH COMPUTER SOFTWARE.

NO. SO WHEN THEY WERE ASSET LIGHT YOU DIDN'T LIKE THEM AND THE MARKETS LOVED THEM. NOW

THAT THEY ARE.

I MADE A.

MISTAKE SPENDING HEAVILY ON CAPEX. A LOT OF SHAREHOLDERS

CAPEX. A LOT OF SHAREHOLDERS DON'T LIKE THEM AS MUCH BECAUSE.

THEY THINK THEY'RE MORE LIKELY TO BE A WINNER BASED ON THE RECORD THAN THEY'RE PROBABLY 90% OR 95% OF WHAT

GETS MERCHANDISED THROUGH WALL STREET, BECAUSE WALL STREET IS INTERESTED IN WHETHER THEY CAN SELL SOMETHING. AND AND I CAN'T

SELL SOMETHING. AND AND I CAN'T RECALL A REPORT ON WALL STREET THAT REALLY GETS INTO THE INTERNAL RATES OF RETURN THAT A BUSINESS IS ACTUALLY EARNING.

WHAT'S MORE IMPORTANT THAN WHAT A BUSINESS IS EARNING? BUT THEY

ASK ALL THESE QUESTIONS ABOUT WHAT WILL HAPPEN NEXT QUARTER.

OR, YOU KNOW, IT'S IT'S JUST IT'S RIDICULOUS. BUT, YOU KNOW,

IT'S RIDICULOUS. BUT, YOU KNOW, INVESTING IS, IS COMING UP WITH WELL, PROBABLY DOES CLOSE TO THE MOST SUCCESSFUL LONG TERM

INVESTOR WAS WAS ROCKEFELLER AND BUT LOOK AT WHAT OIL AND GAS HAS DONE OVER 150 OR A COUPLE OF HUNDRED YEARS. SO HE

KEPT COMPOUNDING AT A VERY GOOD RATE, NOT AS GOOD A RATE AS GEICO WOULD HAVE ACHIEVED IN HIS EARLY YEARS, BECAUSE IT'S EASIER TO DO WHEN YOU'RE SMALL.

GETTING TO DO IT WHEN YOU'RE LARGE IS YOU GOT THE WHOLE WORLD LOOKING AT YOU, TRYING TO FIGURE OUT HOW HOW COME THOSE GUYS ARE DOING IT? WE'RE NOT

DOING IT.

WHY DO YOU LIKE ALPHABET ABOVE ALL OTHERS, AND WHAT MADE YOU INITIATE THIS POSITION?

WHAT WAS THE EUREKA MOMENT?

I WOULD SAY THAT I DON'T LIKE IT AS WELL AS AT LEAST 4 OR 5 OTHER BUSINESSES THAT WE OWN.

OTHER THAN APPLE, THE RAILROAD.

WELL. AMERICAN EXPRESS,

YOU'RE NOT GOING TO GET THE WHOLE PORTFOLIO OUT OF ME, BUT AND OF COURSE YOU LIKE IT ENOUGH TO MAKE IT A HUGE POSITION. BERKSHIRE THAT WAY. I

POSITION. BERKSHIRE THAT WAY. I

MEAN, BERKSHIRE EARNED HIGH RETURNS ON CAPITAL WITHOUT WITHOUT I'M NOT TALKING ABOUT USING THE TRICKS OF LEVERAGE OR THAT SORT OF THING I'M TALKING ABOUT.

BUT I'M TALKING ABOUT WHY ALPHABET VERSUS THE OTHER MAGNIFICENT SEVEN OR THE OTHER, YOU KNOW, HYPERSCALERS WHO ARE DOING THE SAME THING, SPENDING A LOT OF MONEY, AMAZON,

MICROSOFT, WHOEVER IT MAY BE, TO TRY AND WIN IN THIS POSITION OF AI.

WELL, I DON'T WANT TO SIT AROUND KNOCKING THE OTHERS.

THEY DON'T HAVE ANY CHOICE.

TO SPEND LIKE THIS.

YEAH, THEY ARE NOW PLAYING A GAME. IN MANY CASES, THEY ARE

GAME. IN MANY CASES, THEY ARE IN SOME CASES WHERE THEY'RE PLAYING A GAME THEY DON'T WANT TO PLAY. IBM WOULD HAVE LOVED

TO PLAY. IBM WOULD HAVE LOVED IT IF THEY JUST KEPT PLAYING THE GAME THAT IBM WAS PLAYING IN THE 30S OR THE 40S OR THE 50S AND THE 60S, YOU KNOW, AND

THEN SOMEBODY CAME ALONG WITH AND SAID, WE'LL GET A BETTER RESULT FOR YOU ACHIEVING THE OBJECTIVE OF ALL THE CUSTOMERS YOU HAVE, BECAUSE THAT'S ALL YOU'RE GOING TO HAVE, IS YOU

HAVE HAPPY CUSTOMERS, YOU DON'T HAVE CUSTOMERS OVER TIME. AND

THE CUSTOMER IS NOT DUMB. WALL

STREET CAN BE VERY DUMB. AND IN

TERMS OF THEY CAN DREAM, BUT A GUY WITH A GROCERY STORE CAN'T DREAM. I MEAN, I WORKED AT MY

DREAM. I MEAN, I WORKED AT MY GRANDFATHER'S GROCERY STORE AND WE SAW, WELL, WE HAD ONE STORE IN 1869, WE HAD ONE STORE IN

1969. AND, AND OTHER PEOPLE

1969. AND, AND OTHER PEOPLE WERE EARNING HIGH RETURNS ON CAPITAL, SOME ON A NATIONAL SCALE, A AND P, WHICH PEOPLE

DON'T ASSOCIATE WITH ANYMORE.

IN THE 1930S. I MEAN, THEY WERE THEY WERE NUMBER ONE. AND I

MEAN NUMBER ONE OF TRUSTBUSTERS IN WASHINGTON. AND THEY, THEY

IN WASHINGTON. AND THEY, THEY THEY THEY HAD A VERY, VERY, VERY GOOD HAND. AND THAT HAND DISAPPEARED.

SO IT'S A DIFFERENT GAME.

AND YOU LIKE THIS GAME. YOU

UNDERSTAND THIS GAME MORE THAN YOU UNDERSTOOD THE GAME THEY WERE PLAYING BEFORE. IS THAT.

FAIR TO SAY. THERE'S ALL

KINDS OF GAMES I DON'T UNDERSTAND. SURE. YEAH. BUT

UNDERSTAND. SURE. YEAH. BUT

THIS WHY WHY SHOULD I EXPECT TO MAKE MONEY IN ALL KINDS OF THINGS I DON'T UNDERSTAND? AND.

BUT THAT'S WHAT I'M GETTING AT. WHAT DO YOU UNDERSTAND

AT. WHAT DO YOU UNDERSTAND ABOUT THIS GAME AT THIS POINT?

BECAUSE MOST PEOPLE WOULD SAY HE'S NEVER GOING TO BUY ANY TECHNOLOGY STOCKS. AND I THINK

TECHNOLOGY STOCKS. AND I THINK YOU'VE SAID THE SAME THING YOURSELF IN THE PAST.

YEAH. BUT I I'VE DONE IT.

AND ACTUALLY ONE OF THE MOST SUCCESSFUL COMPANIES I WAS ASSOCIATED WITH, GOING BACK TO 1958 WAS WE STARTED A COMPANY CALLED DATA DOCUMENTS. WE

STARTED DATA DOCUMENTS BECAUSE A COUPLE PALS OF MINE READ IN THE PAPER THAT IBM HAD SETTLED AN ANTITRUST SUIT BY DIVESTING,

THEY HAD TO DIVEST 50% OF THE CAPACITY OF WHAT WAS THEIR BEST BUSINESS, AND EVERYBODY KNEW IT WAS THEIR BEST BUSINESS. NOW IT

SO HAPPENS IT RAN OUT AFTER 10 OR 15 YEARS. AND I KNEW SOME OF THE PEOPLE THAT CAUSED IT TO RUN OUT. BUT

RUN OUT. BUT