Buffett Says He Initiated Berkshire's $10B Alphabet Bet

At 95 years old, Warren Buffett no longer serves as CEO of Berkshire Hathaway—Greg Abel took over at the start of 2025—but he remains deeply involved as executive chairman and continues to offer market insights during occasional CNBC appearances. His recent interview revealed a significant shift in strategy: Buffett personally initiated Berkshire's major Alphabet investment, a move that surprised many observers who had assumed Greg Abel was responsible, given Buffett and Berkshire's cautious stance in recent years and Buffett's repeated hints that the market is overvalued.

The investment was substantial. In the first quarter of 2025, Berkshire added over $10 billion（約1.6兆円） to its Alphabet position, then purchased another $10 billion（約1.6兆円） through a private placement. Across both Class A and Class C shares, Alphabet is now the fourth-largest holding in Berkshire's massive equity portfolio. When asked about the decision on CNBC, Buffett stated plainly: "I initiated it." He further disclosed that he regrets not buying the stock earlier. Since Alphabet is making enormous bets on AI, Buffett's backing amounts to a vote of confidence in the technology's future, even if the vote is not unqualified.

Buffett grounded his reasoning in his core investment principle: finding businesses that generate high returns on capital over an extended period. By his calculations, Alphabet earned returns on equity of roughly 31% in 2024 and 32% in 2025, and returns on invested capital (ROIC) of roughly 39% in 2024 and 32% in 2025. These figures reflect Alphabet's track record across multiple successful businesses—cloud services, search, content, and autonomous driving—all of which had strong potential before the AI revolution. However, Buffett tempered his enthusiasm with a pointed concern about the industry's direction.

"The real question with Google and all of its competitors now, because they're all laying out hundreds of billions, and that's real money," Buffett said, referring to the massive capital expenditures hyperscalers are pouring into AI data center infrastructure. "That's the game they're playing now. They weren't playing that game with computer software." His concern is borne out in Alphabet's own performance: ROIC declined from 39% in 2024 to 32% in 2025, largely because Alphabet took on significant debt to fund capex in 2025. The critical unknown is whether these enormous capital commitments will eventually deliver strong returns. Buffett appears to believe that Alphabet's diversified portfolio of strong tech businesses provides a safety buffer if the AI trend encounters a significant setback, but he has made no claim of certainty.

Buffett's public endorsement of Berkshire's Alphabet investment carries weight precisely because he had largely stayed on the sidelines in recent years—he has hinted repeatedly that the market is overvalued and Berkshire has been very conservative. His disclosure that he personally initiated the Alphabet position, combined with his regret at not buying earlier, breaks that pattern and signals a rare moment of conviction. This endorsement matters to the broader AI trade because Alphabet is a major player in artificial intelligence, even though the company operates many other successful businesses in cloud, search, content, and autonomous driving.

However, Buffett's support comes with a notable caveat: he has articulated deep concerns about the capital intensity of the AI buildout itself. The industry is now spending hundreds of billions on data center infrastructure, a scale and type of expenditure that marks a shift from the company's past investment patterns. Buffett's point—that the real question is whether these enormous capital commitments will generate strong returns down the road—reflects a tension at the heart of the AI boom. Alphabet's own metrics underline this concern: its return on invested capital fell from 39% in 2024 to 32% in 2025, a decline that tracks directly to the significant debt the company incurred to fund capex in 2025. Buffett appears to be betting that Alphabet's diversified business portfolio provides a safety buffer even if the AI trend encounters a setback, but the outcome remains uncertain.

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