Buffett’s Berkshire Hathaway unveiled a large new stake in Alphabet last month, instantly pushing the Google parent into Berkshire Hathaway’s top 10 holdings. The move is widely seen as a confirmation of Alphabet’s heavy AI investment and the market’s view of the company as a frontrunner in the AI race.
The investment comes at a moment of transition for Berkshire. Buffett announced in May that he would step down as CEO at the end of this year, though he would retain his stock, handing over decades to Vice President Greg Abel of the company that began as a Nebraska textile mill and became one of the most influential companies in American finance.
Bori doubles down on his suspicions
Michael Berry, however, moves in the opposite direction. Investors who famously profited from betting against the US housing market in 2008 have taken new short positions in Palantir and Nvidia, two of the top beneficiaries of the AI boom. He specifically criticized accounting practices in big tech, arguing that companies “systematically improve the lives of their investors and serve utilitarian purposes for investing hundreds of billions of dollars in graphics chips by accelerating planned obsolescence.”
Bury is also in transition. Scion Asset Management, his hedge fund, will close at the end of the year. In a recent investor letter, he wrote that his “value estimates on the securities are not current, and have not been in sync with the markets for some time.” He has since launched a financial newsletter, Cassandra Unchained, where he continues to express skepticism about the AI boom.
Market segmentation as AI hype peaks
Their counter-moves come as even industry leaders are beginning to accept broader expectations. Sam Altman, CEO of OpenAI, expressed concern about the speed and scale of the anticipated excitement surrounding artificial intelligence.
Still, capital continues to flood into the sector, and the disagreement between two high-profile investors underscores the uncertainty in the market. Buffett turned Berkshire Hathaway into one of the most recognizable names in American investment, while Berry inspired Michael Lewis’s The Big Short and the Christian Bale-starrer film adaptation. Now, with both taking turns in their careers, the divergence in their AI positions is emerging as the closest indicator in the market of whether the market could be nearing a close. The boom is built on solid ground or heading for another historical correction.
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