Key Points

• Warren Buffett retired as Berkshire Hathaway’s CEO on Dec. 31, giving control of the company’s day-to-day operations and investment portfolio to Greg Abel.

• In a recent interview, Abel highlighted Alphabet’s AI ambitions as a core reason for Berkshire’s recent investments in the company.

• Additionally, Berkshire’s new boss sees steady growth in electricity demand driven by the AI data center build-out.

For more than half a century, Warren Buffett steered the ship at Berkshire Hathaway (NYSE:BRKA)(NYSE:BRKB). His generally conservative approach worked phenomenally well, with Berkshire's Class A shares (BRKA) outpacing the benchmark S&P 500 (SNPINDEX:^GSPC) by more than 6,000,000% since the mid-1960s.

But when the Oracle of Omaha retired on Dec. 31, perhaps so did Berkshire's conservative investment approach. Buffett's successor, Greg Abel, has made it clear that his company is pursuing artificial intelligence (AI) growth opportunities in two areas: investments, such as Google parent Alphabet (NASDAQ:GOOGL)(NASDAQ:GOOG), and energy services via Berkshire Hathaway Energy.

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Warren Buffett retired as Berkshire Hathaway's CEO on Dec. 31. Image source: The Motley Fool.

Warren Buffett's understudy has piled into Alphabet (and with good reason)

Although Buffett initiated the first purchase of Alphabet stock last year, it's Abel who more than tripled Berkshire's stake in the company during the first quarter and added another $17 billion in the second quarter. Alphabet has leapfrogged longtime holdings Coca-Cola (NYSE:KO) and Bank of America (NYSE:BAC) to become Berkshire's third-largest position.

While Google's virtual monopoly in internet search serves as Alphabet's foundation, the company's cash flow growth is prominently tied to its cloud infrastructure services platform, Google Cloud.

Before AI became the hottest thing since sliced bread, Google Cloud was delivering sustained sales growth in the low-20% to low-30% range. Since Alphabet integrated generative AI and large language model solutions into Google Cloud, sales growth for this considerably higher-margin segment has gone parabolic. Revenue skyrocketed 82% in the June-ended quarter from the previous year, with Google Cloud generating over $99 billion in annual run rate sales.

Google Cloud knocked it out of the park again. They're now at a ~$99B run rate growing 82% YoY. Another MASSIVE jump in YoY growth

Quarterly YoY growth trends below $GOOG pic.twitter.com/9pAJvuajmh

— Jamin Ball (@jaminball) July 22, 2026

In a recent interview with CNBC's Becky Quick, Abel was asked why he liked Alphabet. Though neither Buffett nor Abel ever delves into the specifics of why they like individual investments, Abel did have this to say:

We have a lot of visibility from within our companies as to how we're using AI, what type of benefits it's delivering. So that brought incremental interest. And then we saw Google as a significant player. Now, there's a lot more to Google than what I just said and why we like it. But those were the fundamental reasons as to why... we now have a significant investment in it.

Image source: Getty Images.

The apple doesn't fall far from the tree

Although Berkshire's new boss has shown that tech is on the menu, which isn't something investors often witnessed with Warren Buffett at the helm, there's still plenty of Buffett's influence guiding Abel.

In particular, Abel extensively discussed Berkshire Hathaway's opportunity as an energy provider for data centers. To be fair, he spent considerable time recognizing the backlash against data centers and noting that providing the necessary infrastructure and services only made sense if it didn't increase costs for its customers.

🚨Data Centers now account for 7% of all US electricity demand.

This is going to be a very serious problem soon. pic.twitter.com/am2WEcPTmt

— Jesse Cohen (@JesseCohenInv) February 15, 2026

Nevertheless, data centers are the best thing that's happened to energy providers in a long time. Goldman Sachs (NYSE:GS) expects electricity prices to rise throughout the remainder of the decade, with data centers accounting for an estimated 40% of electricity demand growth.

Let's be clear: Growth at Berkshire Hathaway Energy isn't going to knock anyone's socks off. But Buffett and Abel favor predictability. The proliferation of data centers should lead to steady growth in electricity demand and Berkshire Hathaway Energy's operating cash flow.

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Bank of America is an advertising partner of Motley Fool Money. Sean Williams has positions in Alphabet and Bank of America. The Motley Fool has positions in and recommends Alphabet, Berkshire Hathaway, and Goldman Sachs Group. The Motley Fool has a disclosure policy.