Greg Abel, the new CEO of Berkshire Hathaway, has offered rare insight into why the conglomerate now counts Alphabet (NASDAQ: GOOG) as its third-largest stock holding. Abel took over as CEO at the start of 2026 after Warren Buffett announced his plan to step down from the role at the company's annual meeting in May 2025, ending Buffett's six-decade run at the helm while he remains chairman.

Abel said Berkshire Hathaway is going all-in on the technology giant because it believes the company will benefit from the AI boom in two ways: through Google stock itself, and through the electricity its utilities can sell to data centers. The stake marks a notable shift for a conglomerate that long shied away from major technology investments outside of its Apple holding, with Buffett historically citing a preference for businesses whose economics he could understand.

How Berkshire Wins From AI

Abel has described Alphabet as a "significant player" in AI, saying that this assessment led him and Warren Buffett to sign off on an additional $10 billion in Alphabet stock three months ago.

At the end of June, Berkshire owned approximately 106 million Alphabet shares worth around $37.8 billion. That makes Alphabet Berkshire's third-largest stock holding, behind only Apple and American Express. The position also represents roughly 10.4% of Berkshire's total cash reserves, which stood at $364.7 billion on June 30 — a cash pile Buffett has repeatedly said exceeds what the company can deploy attractively.

Buffett was the first to buy Alphabet stock, initiating the position during the third quarter of 2025. In a July interview with Fortune, he confirmed it was originally his decision, noting that Abel only makes moves with his approval. However, Abel has taken responsibility for the most recent purchase, which he timed to secure a 6.5% discount on Alphabet's share price. Buffett has also publicly regretted not buying Google years earlier, having cited his own failure to act after learning about the company's economics from his subsidiary GEICO's advertising spending with the search giant.

Buffett, who previously said in a July CNBC interview that Google is "more likely to be a winner," explained that he changed his view once big technology companies began spending heavily on data centers and chips.

Will Berkshire Hathaway Sell Its Energy?

Abel estimated that in Iowa, home to Berkshire Hathaway Energy, data center customers accounted for about 8% of electricity demand last year. That demand is part of a broader surge in electricity consumption across the U.S. driven by data center construction, which utilities and grid operators nationwide have flagged as a major growth driver after roughly two decades of largely flat load growth.

According to the company's 2025 annual filing, its U.S. operations run 32,400 net megawatts of generation capacity in service or under construction, drawing on wind, gas, coal, solar, hydro, nuclear, and geothermal sources.

Berkshire Hathaway Energy plans to spend around $33.5 billion through 2026 to expand generation, storage, and transmission. However, Abel has set a condition for any deals with hyperscalers: other customers cannot end up paying higher rates as a result, and ideally, prices should fall. That stance echoes debates playing out in state utility commissions, where regulators have pressed for protections ensuring ratepayers, rather than tech companies, bear the cost of new data center capacity.

Buffett pointed to IBM's recent revenue miss and said the AI spending war is forcing hyperscalers to spend simply because their rivals are doing so.

He also noted that Alphabet itself is roughly doubling its AI spending to around $185 billion — a figure he said keeps CEO Sundar Pichai up at night. How that capital-intensive race plays out, and whether Berkshire's utilities can sign data center deals on Abel's terms, will be a key storyline for investors to watch as his tenure unfolds.