Key Points

Berkshire Hathaway avoids high-risk AI-focused investments.
The leadership team recognizes the potential ahead and is getting ready for it.
Expansion in one segment of Berkshire's operations is on the horizon, yet the firm operates as a vast conglomerate.

While the company maintains a substantial holding in Alphabet, current Berkshire Hathaway (NYSE: BRKA) (NYSE: BRKB) CEO Greg Abel, much like predecessor Warren Buffett, refrains from placing large, aggressive wagers on artificial intelligence technology.

He remains attuned to the sector's swift expansion and focuses on readying one Berkshire subsidiary for the expected surge in electricity needs to support AI data centers.

The key question remains whether this development will deliver notable benefits to Berkshire Hathaway and its investors.

Image source: Getty Images.

AI and energy remain top of mind for Abel

Amid a packed schedule, Abel noted during Berkshire's yearly shareholder gathering in early May that energy serves as a fundamental requirement for data centers and hyperscalers tied to artificial intelligence. He highlighted that Berkshire Hathaway Energy stands positioned to seize this chance and confirmed active pursuit of related opportunities.

Abel emphasized that Berkshire Hathaway Energy already directs 8 percent of its electricity output in Iowa toward the AI data center sector established there, a share he expects could rise by 50 percent or higher within five years.

This indicates the energy division is prepared for upcoming demand.

Yet the practical impact on Berkshire Hathaway shareholders requires closer examination.

Though not widely discussed, Berkshire's energy operations contributed nearly $4 billion in earnings last year, representing about 10 percent of overall profits apart from fluctuating investment gains. This portion proves meaningful without dominating results.

Data source: Berkshire Hathaway 2025 investor report.

Despite the prospects Abel identifies, the opportunity falls short of transforming the company's trajectory.

AI accounts for modest share of total energy use

The utility sector overall lacked preparation for rising electricity needs spurred by AI data centers, and gaps persist.

Still, artificial intelligence does not dominate national power consumption. Pew Research data shows data centers used roughly 4 percent of U.S. electricity in 2025. Projections of a doubling by 2030 would elevate AI's share to around 8 percent, remaining a limited fraction.

Concern stems from the capital-heavy utility model's history of operating with slim supply margins over many years.

For investors, AI-related energy demand grows quickly yet starts from a modest base. The scale does not yet support a central bullish case for Berkshire Hathaway.

This does not rule out Berkshire as an attractive holding. The conglomerate continues to generate strong cash flows backed by a collection of quality investments.

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James Brumley holds shares in Alphabet. The Motley Fool maintains positions in and endorses Alphabet and Berkshire Hathaway. The Motley Fool maintains a disclosure policy.

The opinions expressed reflect those of the author and may not align with those of Nasdaq, Inc.