Berkshire Hathaway Shareholders Meeting to Take Place This Weekend, Buffett Highlights AI Fraud as Potential Next Major Growth Industry
The Berkshire Hathaway annual shareholder meeting, known as the “investment world’s Spring Festival”, was grandly held over the weekend, marking the first such event without Charlie Munger. Prior to the meeting, a video was played to pay tribute to Munger, and copies of his book “The Almanack of Charles T. Munger” were sold, with around 30,000 shareholders standing up to applaud the longtime business partner of Warren Buffett.
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Charlie Munger, at the age of 99, is remembered for his classic quotes as a key driver of the Berkshire Hathaway empire
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Contents:
Apple CEO Cook also attended, Buffett explains why he reduced Apple stake
Buffett says Japanese trading companies are attractive, may evaluate opportunities in Canada
Cash levels could reach $200 billion
AI fraud may become the next big growth industry
“I hope not only that you will come back next year, but that I will too”
Apple CEO Cook also attended the Berkshire Hathaway shareholder meeting, as Berkshire has been Apple’s largest shareholder outside of ETFs. Cook told CNBC that the company is “very honored” to have Berkshire as a shareholder.
However, in the first quarter of this year, Berkshire reduced its Apple stake by about 13%. Buffett stated that despite the recent sales slowdown, Apple is “extremely likely” to remain the largest holding in his conglomerate.
Buffett said the reduction was due to tax considerations after substantial investment gains, rather than a judgment on the long-term outlook for the stock. He believes tax rates may rise to fund the growing US fiscal deficit, so he preemptively sold some shares to avoid higher taxes.
Berkshire’s holdings data compiled by CNBC shows that Apple remains its largest position, accounting for 40%, far exceeding the second-largest holding in Bank of America at 10.6%.
Buffett believes his bet on Japanese trading companies has been quite compelling, first purchasing shares worth around $6 billion on his 90th birthday in August 2020.
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Japan’s stock market hits new highs, Berkshire makes $8 billion from investing in the top five trading companies
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However, Buffett hinted that Berkshire is evaluating potential investment opportunities north of the border (in Canada). He did not disclose specific details about this potential investment, but the company has obtained confidential treatment for a mysterious stake it has been acquiring over the past three quarters in the financial sector.
According to the first-quarter earnings report, Berkshire’s cash and equivalents have risen from $167.6 billion at the end of 2022 to $188.9 billion.
Buffett stated that the company’s cash holdings could increase to $200 billion by the end of this quarter.
Buffett said: “We’re delighted to spend it, but we won’t spend it unless we think we’re doing something that involves very little risk and we can make a lot of money.”
This also reflects the recent stock market surge, which has left the cash-rich Berkshire unable to deploy its funds.
Buffett believes AI fraud could become the next big growth industry, likening the technology to nuclear weapons due to its transformative potential.
While Buffett admits to being “totally out of my knowledge” on AI, he mentioned recently seeing the process of AI generating its own images on screens, which has made him concerned about the technology. Fraud has always been part of the American landscape, and this will entice those who engage in investment fraud, making AI fraud a potentially rapidly growing industry.
He compared AI to nuclear weapons:
“When we developed nuclear weapons, we let the genie out of the bottle, and the genie has done some terrible things recently, and the power of that genie, it scares me to death. I don’t know how to put the genie back in the bottle, and AI is a little like that.”
Buffett will turn 94 in August and has appointed Greg Abel, the vice chairman of non-insurance businesses and chairman of the energy company, as his successor CEO.
Buffett briefly referred to Abel as the late Charlie Munger during the meeting, later explaining that he has gotten used to it and may “make that mistake again.”
However, Abel said “it’s a great honor.”
Finally, Buffett ended the Q&A session with a humorous farewell:
“I not only hope that you will come back next year, but that I will too.”
