Berkshire Hathaway will serve AI data centers only if it doesn't hurt other customers' rates.
Abel says there must be a net benefit to customers.
Data centers were about 8% of Berkshire's Iowa load last year.
What happened
Berkshire Hathaway CEO Greg Abel said the company will serve hyperscalers (giant cloud companies) only if it does not raise rates for its other utility customers. He spoke on CNBC's "Squawk Box" from Tokyo on Wednesday.
Why it matters
Berkshire's U.S. utility earnings rose 38% in Q2 to $597 million, driven partly by data centers. Data centers were about 8% of Berkshire's Iowa load last year, and Abel says that share can keep climbing if his conditions are met.
What to watch
The growth hinges on communities welcoming data centers and regulators approving projects, despite rising pushback across the U.S. So far, no Berkshire energy site has been rejected, Abel said.
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Greg Abel, who succeeded Warren Buffett as CEO in January, brings deep energy expertise to Berkshire's AI data center strategy. His comments suggest a deliberate approach: supplying power, not owning data centers, and only on terms that protect other customers from rate increases. This stance appears designed to defuse community resistance, which Abel says is growing across the U.S. He notes that in Iowa, property taxes from data centers fund schools and local services, which could help win community support.
Berkshire's energy business is a bright spot, with earnings at its U.S. utilities rising 38% year over year in Q2. The company is investing heavily, with $6.7 billion in first-half capital expenditures attributed to energy and BNSF railroad, plus plans for about $8.6 billion more in 2026. This capital spending is critical for regulated utilities, as rates are set to recover costs plus a return on invested capital.
The key question is whether Berkshire can sustain this growth amid community backlash and tougher comparisons. Abel's rate condition may actually be a strength, as it makes projects more defensible with regulators. However, a moratorium in a key state or a community rejection could still stall projects. Ultimately, the growth case depends on maintaining community and regulatory support while continuing to deliver net benefits to existing customers.
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