Berkshire Hathaway’s Cautious Approach to AI
Berkshire Hathaway, known for its measured investment style, is taking a cautious approach to integrating artificial intelligence (AI) into its operations. The conglomerate’s insurance chief, Ajit Jain, recently acknowledged that AI could be a ‘real game changer’ in assessing and pricing risk, particularly in how insurers evaluate claims. However, Jain emphasized that Berkshire prefers to remain on the sidelines until the opportunity becomes unmistakably clear.
‘We are not very good in terms of being the fastest or the first mover,’ Jain said, adding that Berkshire likes to ‘wait and see until the opportunity crystallises.’ This approach suggests that the conglomerate is unlikely to make large-scale AI bets anytime soon. Berkshire’s insurance operations, including GEICO and various reinsurance businesses, have begun experimenting with AI at the margins, but Jain characterized these efforts as ‘dabbling’ rather than a coordinated push to harness the technology across the group.
The company’s cautious stance on AI contrasts with the current enthusiasm seen elsewhere in the market, where firms are rapidly deploying machine learning systems in various areas. Jain warned against blindly chasing ‘the next new fashionable thing,’ noting that many companies have invested heavily in technology trends that delivered little return.
Berkshire’s conservative posture reflects broader themes in its latest quarterly results. The company posted $4.6 billion in profit for the first quarter of 2025, down sharply from $12.7 billion a year ago, as insurance losses and investment declines weighed on earnings. The firm’s insurance underwriting business was particularly affected by losses from Southern California wildfires.
Despite these challenges, Berkshire’s balance sheet remains robust, with $347.7 billion in cash at the end of the quarter. This gives the company ample capacity to invest in AI or other opportunities should it choose to. Warren Buffett, who continues to chair the board, indicated that Berkshire nearly deployed $10 billion in a recent deal that ultimately fell through. However, absent compelling valuations, Buffett and his deputy, Greg Abel, have preferred to hold back.
As Berkshire enters a new era with Buffett’s planned retirement by year-end and Abel taking full control, the question remains how aggressively the company will pursue technological transformation under new leadership. For now, Berkshire is maintaining its cautious approach to AI, keeping its ‘powder dry’ in case the AI revolution proves as significant as its proponents claim.
