Berkshire Hathaway Shareholders Meeting Highlights: The First Public "Stress Test" for the Successor

On Saturday, May 2nd Central Time in the United States, the annual investment industry gathering—the Berkshire Hathaway 2026 Shareholders Meeting—was held in Omaha.

The meeting lasted about half an hour, with new CEO Abel discussing multiple hot topics, 95-year-old Buffett seated in the front row speaking, and CNBC conducting an exclusive interview with Buffett.

This was Berkshire’s first “behind-the-scenes” annual shareholder meeting in sixty years since Buffett took the helm, and also the first public “stress test” for Buffett’s “successor” Greg Abel.

Having leaders of Berkshire subsidiaries sit on the stage to jointly answer questions with Abel is the most symbolic adjustment at this year’s meeting. This move sends a signal to the outside world: Berkshire’s authority is no longer dependent on personal charisma, but will be built on a more diversified operational system.

Summary of key points from the shareholder meeting by Wallstreet.cn:

1. Buffett on the market:

It’s not an ideal environment for us right now; people’s gambling enthusiasm has never been higher.

The most likely buying opportunity is when everyone else stops answering calls.

Things people discuss and worry about usually don’t happen; instead, sudden black swan events can shake the market.

2. Buffett on the successor:

Abel has done everything I used to do, even more, and he’s doing better in all aspects, so we give this decision a perfect score.

3. Buffett on Apple:

Ten years ago, we bought Apple stock for 35 billion dollars; including dividends, it’s now worth 185 billion, and I did nothing.

Cook succeeded Steve Jobs, creating one of the miracles of American business management.

4. Abel on AI:

AI must benefit our business. We won’t AI just for the sake of AI. We will deploy AI in small, focused ways that create value.

The fake Buffett video played at the meeting highlights cybersecurity risks brought by AI.

Data center construction and its demand on the power grid present huge growth opportunities for utilities.

The energy costs of data centers must be isolated from regular grid users.

5. Abel on investments:

Reaffirming the core four stocks—Apple, American Express, Moody’s, Coca-Cola—as the foundation of the stock portfolio.

Absolutely collaborating with Buffett on investments.

Investments in Japan’s five major trading companies are long-term strategic, deepening cooperation with companies like Tokyo Marine.

Berkshire’s internal structure is lean and efficient, with cross-group capital allocation capabilities, and will not split or spin off subsidiaries.

6. Abel on who his “Charlie Munger” is:

The partnership between Buffett and Munger “cannot be replicated.”

I am surrounded by excellent people, with an outstanding CEO team. I will contact them for advice.

7. Ajit Jain, Vice Chairman of Berkshire Insurance:

The Strait of Hormuz underwriting “depends on price,” and U.S. military escort is one of the prerequisites for this underwriting.

AI is unlikely to reach a level where it can weigh in on pricing and claims decisions anytime soon; it will take many years.

If you expect AI to tell you which stocks to buy or sell, I think that won’t happen.

Earlier, Berkshire Hathaway also released its Q1 financial report, with some highlights as follows:

Berkshire Hathaway’s operating profit in Q1 2026 was $11.35B, up 18% year-over-year. Insurance underwriting profit increased 28%, BNSF railway subsidiary’s profit grew 13%, and foreign exchange gains reversed significantly.

Net investment loss narrowed from $5.04B last year to $1.24B, driving GAAP net profit up approximately 120% year-over-year.

Cash reserves in Q1 reached $397 billion, a record high.

As of March 31, 61% of Berkshire’s total stock fair value was concentrated in American Express, Apple, Bank of America, Chevron, and Coca-Cola.

Below is the transcript of the key points from the 2026 Berkshire Hathaway Shareholders Meeting, in chronological order:

In the first half, Abel and Ajit Jain, Vice Chairman responsible for insurance, co-hosted; in the second half, Abel, along with Katie Farmer, CEO of BNSF Railway, and Adam Johnson, CEO of NetJets, co-hosted.

At the opening of the annual shareholders meeting, Abel officially retired Warren Buffett’s jersey with the number “60,” as a permanent tribute to the “Omaha Prophet” for decades of service to the enterprise group. Retiring jerseys is a sports tradition, regarded as the highest honor for athletes.

The jersey hangs high on the ceiling rafters, alongside the retired jersey of the late investment master Charlie Munger, which bears the number “45,” representing his years of service.

Abel said, “I am very pleased to announce that these two jerseys will hang there forever.”

21:20 Opening remarks for the 2025 shareholders meeting

95-year-old Warren Buffett took his seat in the front row of the board, receiving warm applause from the shareholders present. This is Buffett’s first time in sixty years not being the absolute main figure at Berkshire’s annual shareholders meeting.

The Berkshire shareholder meeting opened with a tribute to Buffett. A montage video reviewed precious photos and footage of Buffett over the years, set to the classic tune “Back in Time” by Huey Lewis and the News, interspersed with highlights from past shareholder meetings.

Abel introduced key company personnel in alphabetical order; when he reached Buffett, the audience erupted in applause.

21:45 Buffett praises Abel: “CEO choice is 100% successful”

Buffett took the microphone from his seat and praised Abel once again. He pointed out that today marks the anniversary of his announcement that Abel would succeed as CEO.

Buffett said, “This is the best decision we’ve ever made, 100% successful. He has done everything I did, even more, and he’s the right person.”

21:50 Buffett praises Apple CEO Cook

Buffett invited the soon-to-retire Apple CEO Tim Cook to stand and acknowledge the audience, echoing Berkshire’s own transition of power from Buffett to new CEO Greg Abel.

Buffett discussed the immense pressure Cook faced succeeding Steve Jobs and how he has lived up to expectations, delivering impressive results.

Buffett said:

Think about it—taking over from Steve (Jobs) and surpassing his achievements requires incredible courage. It’s one of the miracles of American business history. Thank you, Tim. After Steve’s passing, we made an investment decision, allocating nearly 10% of Berkshire’s resources to Apple, which Tim turned into a pre-tax return of about $185 billion.

Earlier this month, Cook announced he would step down as CEO, with John Ternus, Apple’s hardware chief, taking over.

22:00 Abel explains financial report

Abel stated that as competition intensifies, the insurance market is “becoming more relaxed.” Car insurance customers are experiencing unprecedented price comparison shopping.

22:20 Abel on AI: No follow-the-leader betting, continuing Buffett’s investment philosophy

Berkshire CEO Abel on AI: “We won’t AI just for AI’s sake. We will only invest when we see real value. AI must bring substantial benefits to our business. The application of AI creates opportunities for all businesses.”

Abel emphasized Berkshire’s cautious stance on AI application and management, contrasting sharply with other CEOs eager to reshape their businesses or rebrand around this technology.

He said Berkshire will deploy AI in focused, value-creating ways, while also noting the potential risks to “humans,” with the company maintaining high vigilance.

22:40 Abel believes data center construction will bring huge growth to utilities

Abel said that large-scale data center construction and the resulting demand on the power grid are creating significant growth opportunities for utilities.

Using expansion of massive data centers in Iowa as an example, Abel pointed out that current energy demand is still well below peak load capacity:

From the peak load of data centers—meaning actual electricity consumption—currently about 8%. Industry experts generally aim for 5% to 10%, and we’ve already reached 8%. So, we expect this ratio to grow another 50% or more over the next five years on this basis.

Abel stressed that isolating data center energy costs from regular grid users and ensuring that the electricity-consuming companies bear the costs themselves is crucial. “Massive data center operators, data centers, and all kinds of electricity users—must bear all costs themselves.”

During the AI boom, the pressure on regional grids from data centers has become a focus of environmental and consumer rights advocacy groups.

22:50 Impact on pre-fab home builder Clayton driven by interest rates

Abel noted that pre-fab home builder Clayton Homes is impacted, as potential homebuyers face multiple pressures, including high mortgage rates. This is clearly driven by current interest rate levels. Consumers also face challenges in other areas.

He said the company’s goal is to provide “affordable housing” for American consumers, which drew enthusiastic applause.

23:05 The first question in Q&A: Buffett’s question—Why hold Berkshire long-term?

The Q&A session unexpectedly became a vivid lesson on AI risks. At the start, Abel played a video showing a familiar face.

On the big screen, a suited “Buffett” introduced himself and asked Abel: Why should investors hold Berkshire stock long-term?

Hello everyone, I’m Warren from Omaha. Abel, I’ve been watching this company for quite some time, a very long time. My question is simple. I’m 95 years old, and besides time and cherry cola, I lack nothing. I want to know—just to tell my shareholder friends—why they should hold Berkshire’s stock long-term?

Then, Abel revealed the truth: this video was not real footage but a deepfake generated with AI technology. He used this opportunity to highlight cybersecurity risks to the shareholders present.

Regarding Buffett’s question about why investors should continue holding Berkshire stock, Abel emphasized the company’s enormous cash reserves of $397 billion, which give Berkshire full freedom of action. “We hold cash and U.S. Treasuries, which serve several purposes. We don’t intend to be beholden to anyone.”

Abel reaffirmed Buffett’s long-standing core investment and operational principles.

He told investors that holding cash in the form of U.S. Treasuries, maintaining financial independence, flexible capital allocation, tax efficiency, and vigilance against the “ABC”—Arrogance, Bureaucracy, and Complacency—remain Berkshire’s top priorities:

We’ve heard countless times: arrogance, bureaucracy, complacency—these “three poisons” can quietly erode a company and ultimately destroy it. We will never allow this to happen at Berkshire.

He described Berkshire as a unique enterprise—able to integrate diverse businesses while maintaining the ability to deploy capital swiftly and flexibly:

Berkshire is a corporate group, and we are very aware of that. But we are a different kind of corporate group because we can allocate capital very efficiently. We can shift funds from insurance to non-insurance businesses, invest in stocks, or hold cash when we see fit.

Abel pointed out that this deepfake Buffett video vividly illustrates the cybersecurity risks Berkshire faces driven by AI:

This is a good warning for our team. It’s a major risk we face every day across Berkshire. Berkshire will dedicate efforts to using technology to identify cyber threats, especially in our insurance segment. Abel also specifically stated that the creation of this deepfake Buffett video was done without Buffett’s participation or authorization.

23:15 The real first question in the Q&A: Given current AI tools, where does human judgment still hold an advantage for Berkshire?

Ajit Jain, Vice Chairman of Insurance: AI is very popular now. In insurance and non-insurance fields, many are rushing in. Clearly, if AI becomes as expected, it will be a huge game-changer.

Currently, we see AI used as a productivity tool—reducing labor costs and automating routine, repetitive tasks. I don’t think AI can yet make decisions on pricing, claims, and other trade-offs; that will take many years.

And I tend to be skeptical. If someone tells me they can solve that problem, I’d be surprised. So, if you’re expecting AI to tell you which stocks to buy or sell, I think that won’t happen.

Jain said that a few weeks ago, when he was with Abel discussing this, Abel immediately called his team and brought up cyber risks, which they had already discussed.

Then they quickly mentioned how, in the entire insurance business and in the construction philosophy they care about—how to improve coding and management efficiency. They immediately brought this up. As you mentioned, how to become more efficient. They also shared a very good example.

My point is, if we look at a risk, and let traditional underwriters handle it, we might only focus on the top five risks. Your team pointed this out.

Now, we can be quite quick, focusing on those big risks, but with technology, we can also see other risks quickly. We might pay attention to another 15 risks and have strong judgment about them.

23:20 The second question: How to balance patience and action?

Question: As a young investor navigating uncertainty and rapid technological change, I often find it hard to balance patience and action. How do you personally distinguish between the two?

Answer: One of Berkshire’s greatest strengths is patience and discipline in capital allocation. Over time, opportunities will always arise for you. That doesn’t mean there are no opportunities now, but you don’t need to deploy all your capital or spend everything immediately.

That’s exactly how we operate daily. We recognize that holding large amounts of cash and U.S. Treasuries is a significant asset. For example, I see this cash as an asset—a huge opportunity. When you feel a particular opportunity has strong value, you’ll sense that moment. When will we see these?

We’ve articulated our investment philosophy, which emphasizes understanding what we invest in. We want deep understanding—you mentioned technology and the rapid pace of change. I always start from that point, and I know Berkshire has always done the same: Do we understand this business? Do we understand this opportunity? More importantly, do we understand the risks involved?

Then, we want a very clear view of the economic prospects over the next 5 or 10 years. Yes, the next year is important, but we don’t invest just for one year. We must have a long-term view of the direction of the opportunity. We also go further—we will hold these investments forever.

So, we think: We want a strong opinion of the management team there, that they are capable and operate with high integrity. But most importantly, the value must first justify deploying our capital. We’re not in a rush to invest in suboptimal opportunities.

We want to see that it aligns with our principles, and then, as I said before, we act decisively, quickly, and with large capital.

23:25 The third question: How to balance supervision of wholly owned subsidiaries and stock investments, and how to view the large stock portfolio

Question: Abel, considering your background as a business operator, which differs from Warren’s background as a public market investor. Can you share how you balance your time between supervising wholly owned subsidiaries and the current $288 billion stock portfolio? Also, compared to Warren’s historical approach, does your operator perspective change how you evaluate new investment opportunities?

Abel shared new insights on how he views Berkshire’s large stock portfolio, emphasizing a concentrated investment strategy anchored by a few core holdings.

He called Apple, American Express, Moody’s, and Coca-Cola the “core four,” viewing them as the foundation of Berkshire’s stock investments. He also highlighted the company’s large holdings in Japan’s five major trading companies, considering them another key pillar of the portfolio, with a long-term commitment to these companies. Besides these core holdings, Abel named other significant investments, including Bank of America, Chevron, and Alphabet. Berkshire bought about $4 billion worth of Alphabet stock in Q3 2025.

Abel said he will take a more proactive role in managing investments, adjusting or increasing positions as appropriate. He added that he is working “full force” with Buffett on investment decisions.

Abel: I’ve been running various businesses at Berkshire Energy for years, then served as Vice Chairman of non-insurance operations. Fortunately, Jain and I have held these great roles for the past 8, now 9 years. This has created a very important opportunity for me to understand these businesses.

As I’ve mentioned, we have excellent businesses and leadership, but there are still opportunities. It reminds me that I will spend some time on these businesses, ensuring proper capital allocation, assessing risks, and encouraging operational excellence. Because, look, as an insider, it’s easy to look at internal metrics and convince yourself you’re doing well, but you must look outward—what do customers see and feel? What are competitors doing? I think that’s where operational value can be added.

I’ve mentioned giving Adam Wright more responsibilities, or him taking on more duties across 32 businesses. He will bring excellent operational knowledge, along with our insurance team.

Now, regarding the stock portfolio and time allocation: we see huge opportunities in deploying capital on the balance sheet. I shared the size of our cash and U.S. Treasuries. I want to emphasize that, if you look at our current stock holdings, as I outlined in the letter, we have a concentrated portfolio. We emphasize this as “core,” but the best way to describe it is a focused, concentrated portfolio. We have what we call core and concentrated investments.

I highlighted our investments in Japan. Interestingly, if you look at some of the other significant positions we hold, I’d add that we may still be buying stocks or rationalizing positions in the portfolio. So, the first group I mentioned is just under $200 billion, and we keep it around that level. We now have close to $100 billion, or about $85 billion. Plus, there are other Berkshire investments, like Bank of America, Chevron, Google, totaling another $70 billion. This underscores that a very large part of our total investments is highly concentrated, and active management of these investments is actually limited—that’s what I want to emphasize.

We also understand those businesses. We understand the management teams. These are all things Warren and I will continue to collaborate and discuss. You don’t need to talk about them daily, but if something happens in these businesses, we’ll discuss it that week or month. Maybe about their strategic direction, or what we’ve learned. For example, the Japanese companies just announced earnings in the past 48 hours, and Warren and I discussed their results and what we see there yesterday morning. So, these are core holdings, but that doesn’t mean we shelve them or that they are just a focus of ongoing evaluation and concentrated investment.

Ted manages another $20 billion or so of capital, slightly less than that, but his responsibilities go far beyond. He helps us with other opportunities, or risk assessment in our businesses. We’re fortunate to have these resources, but considering the management and workload around them, it’s a very manageable portfolio.

As for timing, the opportunity to deploy cash and U.S. Treasuries is very significant—whether in stocks, operational businesses we see, or insurance.

Regarding time management: yes, we will spend some time on operations. We prioritize this because we see great opportunities to improve and narrow gaps in operational excellence. We see opportunities within our existing investments, either to increase holdings or adjust sizes. We also continuously evaluate other opportunities in the market—whether acquiring a private or public company outright. Similarly, we consider incremental opportunities if we want to own part of a company. These are evaluated in the same way, based on economic outlooks. And this is closely related to the previous answer.

Jain: I really believe that capital allocation and operating businesses are two sides of the same coin. Warren said many years ago that I think makes a lot of sense: “A good capital allocator will be a good operator, and vice versa.”

Abel: When you think about our operating companies, I’ve mentioned before that we have a very deep talent pool. We have outstanding operators who understand their businesses. They know their industries, their customers. Yes, there’s room for improvement—this is a continuous process, and we will narrow those gaps. But we have an excellent team there. Whether it’s Jain, myself, Adam Wright, we spend time making sure we’re satisfied with how we allocate capital, understand risks, and are aware of those gaps.

23:35 The fourth question: Patience has opportunity costs—how should long-term investors think about capital allocation?

Question: When patience involves real opportunity costs, how should long-term investors today think about their approach to capital allocation? How do individuals balance patience and action, especially given that Mr. Buffett’s decades-long track record has set a standard?

Abel: Returning to our capital allocation approach and our long-term philosophy, it aligns very closely with our owners and shareholders present. They take a very long-term approach to investing. We’re fortunate to have this unique owner base in our holdings. And, over the long run, Berkshire will have significant opportunities. This again comes back to patience and discipline in capital allocation. Do we know what will happen tomorrow? Or if that event will occur in three years, two years? But markets will misprice things, and that will give us opportunities again. That’s where our disciplined approach comes in—knowing what our investment principles are around these activities.

It’s not that we don’t see excellent companies today. We’d love to own many of them. I’d be a little cautious. Over the long term, we’d be happy to hold those companies because they have excellent management teams and outstanding businesses. We evaluate that. I’d say, when you think about the world, it doesn’t mean there are dozens of such companies, but they do exist. But relative to the opportunities, the economic outlook of those companies, and the prices that reflect risks, we’re not interested in buying at those prices—whether partial or full ownership. That doesn’t mean the opportunity won’t come in the future.

That’s what we spend time preparing for: first, maintaining discipline; second, being aware of some core opportunities we value or see at the right price. It all comes back to discipline.

And you ask how I personally balance patience and action. Again, this aligns with my role—I’m very fortunate to work with Warren, Jain, and others. We do this because we love and believe in Berkshire. Warren has made a huge commitment to Berkshire, with deep understanding and passion. Based on that, he wants to create something very long-term, including the opportunities it might generate. As for me personally, and I know all of us, we bring the same passion, and we fully intend to do this in a manner consistent with the past.

Jain: You know, insurance, like investing, is a game that requires patience. It’s very hard to sit back and do nothing. When I hire people, my usual approach is to tell them directly: Your job is to say “No.” Day after day, you’ll be bombarded with various deals, but your fundamental responsibility is to say “No.” Occasionally, you’ll encounter a deal that hits you like a board, shouting “Money’s coming,” and then you come to me, and we decide whether to do it or not.

You know, joking, when everyone else is being spun around by brokers and taken to London, and you sit there doing nothing—that’s really hard. I think the true test of success in insurance, and in investing, is the ability to say “No.”

23:40 The fifth question: Providing insurance for ships crossing the Strait of Hormuz

When asked when and how Berkshire would provide insurance for ships crossing the war-torn Strait of Hormuz, Berkshire Insurance Vice Chairman Ajit Jain gave a concise answer: “Simply put, it depends on price.” The audience immediately responded with laughter and applause.

Jain said Berkshire is involved in a plan to insure ships crossing the Strait of Hormuz, but no policies have been issued yet. The Strait has been closed or tightly controlled during conflicts involving the U.S., Iran, and others. “We’ve participated on a small scale in a plan to insure ships in the Strait, but no policies have been issued so far.”

He added that U.S. Navy escort for transit ships would be one of the underwriting conditions. “The plan is still being refined. But if we can secure favorable terms—including underwriting decision-making conditions and Navy escort guarantees—we’ve provided what we believe is an acceptable price. But there’s no real progress yet.”

23:45 The sixth question: How to manage Warren Buffett’s investment portfolio?

Question: How do you manage Warren Buffett’s investment portfolio?

Abel: Regarding managing the existing portfolio and its contents, as you mentioned, it was built by Warren, but it’s a set of companies Warren knows very well. And I am very confident I understand these businesses and their economic prospects. That’s why, when I write in the letter, I really want to convey a message: yes, we are very satisfied with these companies, we understand them, it’s a focused portfolio, but you know, their businesses will evolve, and risks may emerge. So, we will continue to evaluate them, but it’s a portfolio we are very happy with.

Warren has mentioned the remarkable success of Tim Cook at Apple. Warren and Tim recently discussed this, and they agreed that Warren’s investment in Apple was not because it was a tech stock. He saw what the product was and how much consumers valued it. It’s an extraordinary perspective, but also one many of us would apply similarly.

For example, in the power business, I know a lot—how to generate power, how to transmit, etc. But am I really that interested in how iPhones are made? I’d be curious about where they’re manufactured and the risks and challenges around that. But I trust our team completely, and when we look at it more broadly, we ask ourselves: do we understand its value and why it’s valuable? That’s really about its value to consumers.

I think we have a unique opportunity, and I’m very fortunate that Warren comes to the office every day. We’re lucky to discuss other potential opportunities, bringing different skill sets. But ultimately, we’ll narrow down quickly, understand what the opportunity is, why it’s valuable, why consumers or users in that industry will find it durable, and then assess the related risks. That’s essentially Warren’s approach, and mine as well.

Regarding our current portfolio, we always know what we’ve invested in. But in terms of understanding the opportunities and risks, we’re very confident in our clear view, and we’re satisfied with our current position.

23:50 The seventh question: Jain and insurance succession planning, Abel’s succession plan

When asked about Jain and his own succession plan, Abel said the board takes such matters very seriously: “They have already developed plans and are continuously discussing. So, if Jain cannot perform his duties today, or I cannot, our board clearly knows what actions to take.”

These two succession plans are obviously important topics. Jain joined Berkshire in 1986, and he’s the architect of our insurance business, creating an unparalleled franchise with a strong culture and discipline.

When Warren announced the transition plan last year, the first thing he did was gather our top five managers in insurance, sit down, and discuss the business and culture. For me, it was an extraordinary opportunity to expand my knowledge of insurance. I saw very deep management and insurance experience in that team, sharing the same values and culture Jain emphasized.

Maintaining a disciplined culture is challenging. In insurance, telling active underwriters to “take a few months off” is not easy. But Jain has an excellent team around him, and our board takes succession very seriously. We have a solid plan, and if Jain or I cannot perform, the board knows what to do.

Regarding culture and underwriting focus, I follow some simple rules. The actual decision-makers are very few; the top three underwriters I work with have been together for over 35 years. Compensation is fixed salary, not a complex formula that gives upside to individuals while Berkshire bears downside risk. We insulate them from market fluctuations, so they can do the right thing with peace of mind.

Over the years, I’ve seen all these compensation plans. I told Warren: give me a plan, and I can find loopholes; you won’t see it for many years. Plus, employees who lose and want to renegotiate, or those who win and want to walk away with everything—that’s a huge challenge.

23:55 The eighth question: When will Berkshire’s utility companies phase out fossil fuels?

Question: When will Berkshire’s utility companies eliminate fossil fuels, switch to renewable energy alternatives, and stop causing irreversible damage to the environment and future generations?

Abel: We operate as stewards of these assets, serving our states and customers. First and foremost, we must absolutely comply with current laws, including federal regulations. Our team is committed to compliance and doing things right. We have plans regarding resources and timing for retiring coal and gas plants, largely driven by state policies. State governments will decide how we operate and how long these assets run, because ultimately, customers bear the costs and risks.

Look at our Iowa utility, where about 93% of energy comes from renewables—leading nationwide and at affordable costs. But we still operate coal plants, which are needed to stabilize the system during peak times, unless absolutely necessary.

The challenge is that large-scale data centers put significant pressure on the system. If AI continues to develop, the use of carbon-based generation will increase, adding stress to the grid and the industry.

01:20 Abel returns to the stage to host the afternoon session of the shareholders meeting

Greg Abel reappeared on stage at the CHI Health Center in Omaha, Nebraska, to host the afternoon session of Berkshire Hathaway’s annual shareholders meeting.

Accompanying Abel were Katie Farmer, CEO of BNSF Railway, and Adam Johnson, CEO of NetJets and President of Consumer Products, Services & Retail.

01:25 The ninth question: How does geopolitics affect Berkshire subsidiaries?

Question: How has the current Middle East geopolitical situation impacted Berkshire’s subsidiaries?

Abel: It indeed affects all our businesses in various ways. But I am most proud that we operate with a long-term perspective. When the phone rings, you know challenges will come, but that’s okay. We explore, we work hard, and we always find ways to overcome. Regarding the situation related to Iran conflicts and Middle East tensions, I see our team taking the same attitude: this is the reality we face. What’s the best solution for our customers? How can we continue to serve them as we have in the past?

I mentioned the LSBI pipeline’s anti-foaming agent; they usually don’t sell much to the Middle East, but when they start trying to solve this challenge, a lot happens. That doesn’t mean our business isn’t directly affected. Our chemical group, their input costs have actually doubled in a very short time. Over time, prices will adjust based on our contracts, and the situation will rebalance. In terms of managing our operations, we’re really just working hard and operating long-term.

BNSF CEO: Railroads are a very good reflection of industrial and consumer economic conditions because our loadings cover various bulk commodities. We see several impacts from the Middle East conflict. Supply chain disruptions have created opportunities for some commodities, like aggregates and steel, with increasing demand. Our largest business is intermodal, and as fuel prices rise, our intermodal business becomes more competitive. But overall, if fuel prices stay high long-term, it will impact consumer demand and affect all our businesses.

Yes, we see some effects. Some large retailers say consumers now have to make choices about what to buy. If fuel prices stay high for a long time, I believe we’ll see that impact ripple through our business.

NetJets CEO and President of Consumer Products, Services & Retail, Adam Johnson, noted that rising costs, including oil prices reaching $100 per barrel at times, have begun to suppress demand in some areas:

In consumer goods and brick-and-mortar retail, demand has been affected. Acknowledging these pressures, Johnson said his businesses are accustomed to seeking responses amid volatility. We’re prepared to handle these situations and make adjustments when needed. But it’s true that some retail and consumer goods sectors are feeling the impact.

01:35 The tenth question: How does Berkshire’s decentralized model stay competitive? How does BNSF maintain its edge?

Question: Berkshire’s system relies on decentralization. Each manager acts as CEO of their subsidiary. Which operations need more oversight, and how do you handle underperforming managers? BNSF’s profitability lags behind competitors—how will it stay competitive against rivals and new technologies?

Abel: I emphasized decentralization, risk discipline, and capital allocation. We have a group of outstanding leaders and companies who are closest to their customers. If they think like owners, we’ll get very good results across the group.

But decentralization doesn’t mean we shirk responsibility. Autonomy means you must accept that with great responsibility and pride in doing things right. We have high expectations—are they managing risks? Do they see themselves as chief risk officers? Are they good at allocating capital? If we see poor performance or bad decisions, that’s when we step in and discuss.

BNSF CEO: We fully understand that continuing to drive efficient operations, maintaining competitive cost structures, and narrowing profit gaps with competitors are critical.

Our top priority in 2025 was improving train efficiency. Improving single-car efficiency frees up resources, creates capacity, and allows us to handle more freight with fewer assets. In Q1, we handled more freight than last year’s Q1, but with 260 fewer locomotives.

The second focus is on our technological transformation. We’re attracting data scientists and operations researchers to work with our network operations center, studying digital twins and providing predictive ETA for customers. Our fuel efficiency hit a record in Q1.

Regarding competition with trucks, among all railroads, we have the largest intermodal network. We now operate most trains with only two people instead of five. But we still need to be allowed to innovate and need supportive regulations to enable railroads to compete with trucks.

NetJets CEO: I came back on June 1, 2015. I asked myself: how many truly understand our business on both ends? NetJets is complex; we fly to thousands of airports in 150 countries. I didn’t like that answer—too few.

That’s where we started rebuilding the culture. I remember preparing for my first board meeting, talking about growth. Abel kindly pulled me aside and said, “Why don’t you let Warren worry less and focus on reducing debt first?” That was a lesson I remember well.

We talk about safety and service. Warren, after becoming a customer, acquired NetJets in 1998, and he said: “I want safety, I want service.” We’ve been very focused on making sure everyone stays on that track. That’s largely why we’ve been able to pay down debt, return cash to Berkshire Hathaway, and be a leader in the service industry.

01:50 The eleventh question: How do tariffs impact the asset portfolio?

Question: Does Berkshire Hathaway consider seeking tariff relief or compensation plans for its wholly owned operations facing import costs? How significant is this impact across the portfolio?

Abel: The impact of tariffs on our entire portfolio is very similar to the discussion on Middle East tensions. We experienced this during our first term in government and learned lessons, so we’re better prepared. That’s to work hard ourselves; we’ll manage well. We’ll find ways to serve customers, either through direct contracts or through products we produce. Our team is doing a great job handling this. There are many things to clarify, and we’re not actively seeking these.

BNSF CEO: No compensation is planned, but I’ll say a few words about tariffs. Early in 2025, we saw some customers ship early before tariffs took effect, boosting freight volumes. Then, in late 2025, things stabilized, and by 2026, our customers had adapted and adjusted to tariffs. That said, it introduces some uncertainty. From a planning perspective, it’s very difficult for our customers, causing some capital to hold back on manufacturing investments. Tariff uncertainty is a real impact we see on our customers.

NetJets CEO: I’ll use Berkshire Hathaway Automotive as an example. Its new car sales this year are slightly down from last year, partly due to tariffs. The problem is, tariffs change daily, and understanding this “bouncing ball” itself is a task.

Among our 32 consumer, service, and retail companies, the average age is 88 years. When I call those CEOs, they say: “We’ve been dealing with tariffs for 100 years.” Think about the past seven or eight years—dealing with a global pandemic, the highest inflation in four decades, and now the “bouncing ball” tariffs. Companies have done very well managing these issues, and I believe our future looks quite good.

01:55 The twelfth question: Japan portfolio

Question: Berkshire’s investment in five Japanese trading companies is passive, bought at good prices, financed in yen, and involves good businesses. Your deal with Tokyo Marine is very different—a ten-year joint M&A and reinsurance partnership. This is an unprecedented level of operational integration for Berkshire internationally. What does this look like in practice? Does it signal that under your leadership, Berkshire will shift toward more active international partnerships?

Abel: Tokyo Marine is doing very well. I’ve laid some groundwork, saying this is a strategic relationship, not a financial deal. We like our 2.5% stake in Tokyo Marine, which will be a long-term investment. It’s similar to our other five investments in Japan; we really see them as forever because it’s beyond just investing—it’s about the relationships we want to build there. You’ll continue to see this, as detailed in the underwriting opportunities, where we share risks and rewards, effectively representing about 2.5% of their books. Again, it’s partly a financial transaction, but it also involves a lot of trust.

The third point is that the partnership emphasizes various aspects of how we want this relationship to develop, which remains to be seen. We’ll let it evolve naturally. This partner shares our culture and values. So, undoubtedly, many good years lie ahead. But regarding seeking outright acquisitions in insurance or other areas, that will develop over time—something Jain and Tokyo Marine’s executives will discuss. If such opportunities arise, we’ll be very happy.

02:00 The thirteenth question: Will Berkshire divest or spin off businesses in the future?

Question: Are there any future scenarios you foresee where Berkshire might divest or spin off subsidiaries? If so, what are they?

In response to this shareholder question, Abel said he expects Berkshire Hathaway not to spin off or divest subsidiaries. He emphasized Berkshire’s flat organizational structure, the absence of bureaucratic layers, and the unique ability of this enterprise group to allocate capital flexibly across businesses. “We are a corporate group, but an efficient one. We don’t have layers of management.”

Abel said Berkshire is committed to long-term ownership of acquired companies, but in some cases, might consider selling. “When we buy something, it’s with the intention of holding forever. When we acquire a utility, we tell regulators it’s a permanent hold. But that must be a relationship that makes sense