Greg Abel Says AI Data Center Power Demand Is A ‘Big Constraint’ – And A Berkshire Opportunity

In an interview with CNBC, Berkshire Hathaway CEO Greg Abel said the broader economy is “incredibly vibrant,” and that the underlying fundamentals remain “strong.”

• Abel said there is “a lot more to Google” than AI, but noted that it’s a “significant player” in the sector.
• He added that Berkshire has had no specific energy infrastructure site rejected to date and plans to move ahead with sites under construction.
• According to Abel, AI’s enormous power demand could accelerate investment in cleaner energy technologies and water quality improvements.

Berkshire Hathaway CEO Greg Abel said on Tuesday that energy remains a “big constraint” for the rapid buildout of AI data centers, adding that Berkshire is willing to meet the growing power needs of hyperscalers.

“I've sort of always had a strong view that energy would be the constraint,” Abel said in a CNBC interview. “I continue to see that as a big constraint and one of the other challenges, but we do still see it as a significant opportunity for Berkshire.”

While energy can be produced, preparing sites and building the infrastructure needed to deliver power to large data centers can take considerable time. Abel said Berkshire still sees an opportunity in meeting the additional electricity demand from data centers.

Why Berkshire Likes Alphabet

Abel said Berkshire’s investment in Alphabet (GOOG, GOOGL) was initially started by Warren Buffett roughly 15 months ago. “We all are seeing and feeling the impact of AI,” he said, adding that Berkshire has visibility into how its companies are using AI and the benefits it is delivering.

Abel said there is “a lot more to Google” than AI, but noted that it’s a “significant player” in the sector.

GOOGL stock edged 0.4% higher in pre-market trade. On Stocktwits, retail sentiment around the tech giant remained in ‘bearish’ territory over the past day. The shares have fallen nearly 6% over the past month amid broader market pressures, but gained 7% so far this year.

Berkshire Ready To Serve Hyperscalers

Abel said Berkshire has established principles for serving hyperscalers, including ensuring that existing customers do not bear the cost of additional data-center demand.

The company wants new data-center loads to be a net benefit to its existing customers, while communities must also understand the impact on water usage and be open to hosting the facilities.

Abel said Berkshire has not had a specific energy infrastructure site rejected to date and expects to continue moving forward with sites already under construction. He also added that the enormous power requirements associated with AI could ultimately accelerate investment in cleaner technologies and improvements in water quality.

Housing Recovery Won’t Be A ‘Hockey Stick’

On the U.S. housing market, Abel struck a cautious tone, saying Berkshire does not expect an immediate recovery. “We don’t see any type of immediate recovery or any type of hockey stick there,” Abel said.

Discussing Berkshire’s housing operations and Taylor Morrison, Abel said the company views housing as a long-term opportunity but expects the road ahead to remain “bumpy.”

Abel described the broader economy as “incredibly vibrant,” while acknowledging that consumers continue to feel pressure and are stretching their dollars further.

“There's no question when we look at the underlying results but at the same time the fundamentals around the economy, at least from what we're seeing through the second quarter, remain very strong,” he said.

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