Warren Buffett is skeptical about AI and, despite its great potential, also warns of its possible dangers. Meanwhile, companies in his portfolio are increasingly relying on the technology. A group of Berkshire Hathaway shareholders is now calling for greater monitoring of AI risks by an independent committee.
• Buffett is skeptical about AI
• However, Buffett also recognizes potential
• Investor group calls for AI monitoring committee
Buffett’s warning about AI
AI has been a dominant market topic for some time now. However, there are not only supporters, but also skeptics. This also includes the investment legend Warren Buffett. “I don’t know anything about AI,” the billionaire explained, for example, at the annual general meeting of his investment company Berkshire Hathaway last year, “but that doesn’t mean that I deny its existence or importance or anything like that,” he admitted.
The star investor also compared artificial intelligence with nuclear weapons. He described AI as a “genie in a bottle” that, like nuclear weapons, brings with it risks that are difficult to control. “We may wish we had never seen this genie,” he emphasized.
Buffett is particularly concerned about the enormous potential for fraud in AI. He pointed out that AI-generated images and videos now appear so deceptively real that their authenticity can no longer be verified. According to Buffett, this could open up entirely new opportunities for fraudsters: “If I were interested in fraud, this would be the fastest growing industry of all time.” The billionaire also reported that he himself had fallen victim to such a deepfake video in which he appeared to be asking other people for money.
AI stocks in Buffett’s portfolio
While Warren Buffett approaches artificial intelligence (AI) with skepticism and emphasizes both its positive and negative potential, the companies in his portfolio are far more optimistic. Some of Berkshire’s investments are also clearly investing in the area of artificial intelligence. A prominent example is Apple, the largest position in Berkshire Hathaway’s portfolio.
As of the third quarter of 2024, the Oracle of Omaha hedge fund held 300,000,000 shares of the company. With more than 26 percent of the portfolio share, this corresponds to Buffett’s largest investment.
Berkshire shareholder calls for AI monitoring committee
As the Reuters news agency recently reported, some Berkshire shareholders would like to have a committee of independent directors oversee the risks associated with artificial intelligence at the dozens of companies in Warren Buffett’s conglomerate.
Activist investor group Tulipshare submitted a proposal to Berkshire Hathaway’s annual shareholder meeting on May 3 that would establish a dedicated AI committee. This is intended to assess potential risks caused by the improper use of artificial intelligence – such as data leaks, invasions of privacy, business interruptions and human rights violations. Because of Berkshire’s influence in various industries, Tulipshare sees the company in a unique position to take a leading role in AI governance.
Despite his influential position – Buffett controls 30.2 percent of Berkshire’s voting rights – he has traditionally rejected proposals that call for reports or independent committees to monitor the business. He justifies this with Berkshire’s decentralized structure, which allows the subsidiaries extensive independence.
However, Tulipshare argues that an AI committee would fit the company’s strategy by pooling centralized expertise and control while allowing subsidiaries to continue to operate independently. Additionally, Buffett’s voting weight could also bode well for the proposal, the investor group said, citing “personal anecdotes he has shared about deepfakes that were targeted at him to spread misinformation.”
Editorial team finanzen.net
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