The 2026 Berkshire Hathaway Shareholders Meeting Highlights in 800 Words Are Here

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 under Buffett’s leadership, 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. It 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.

The key points summarized by Wallstreet.cn are as follows:

1. Buffett on the market:

It’s not an ideal environment 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 has now grown to 1.85 trillion, 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 the 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.

Working in “absolute cooperation” 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 divest subsidiaries.

6. Abel on his “Charlie Munger”:

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

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

7. Berkshire Insurance Vice Chairman Ajit Jain:

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 first-quarter financial report, with some key points as follows:

Berkshire Hathaway’s operating profit in Q1 2026 was $185B, up 18% year-over-year. Among them, underwriting profit in insurance increased 28%, BNSF railway subsidiary profit increased 13%, and foreign exchange gains reversed significantly.

Net investment loss narrowed from $8B last year to $1.24 billion, driving GAAP net profit to increase by about 120% year-over-year.

Cash reserves in the first quarter reached $397 billion, a record high.

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

Below are the transcript highlights of Berkshire’s 2026 Shareholders Meeting, in chronological order:

First half, co-hosted with Vice Chairman of Insurance Ajit Jain; second half, co-hosted with BNSF CEO Katie Farmer and NetJets CEO Adam Johnson.

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”’s 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 late investment master Charlie Munger’s jersey, which bears the number “45,” representing his years of service.

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

8:20 PM, 2025 Shareholders Meeting Opening Remarks

95-year-old Warren Buffett took his seat in the front row of the board, greeted with warm applause from the shareholders. This is Buffett’s first time in sixty years no longer the absolute main character at Berkshire’s annual meeting.

The Berkshire shareholder meeting opened with a tribute to Buffett. A video montage 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.

8:45 PM Buffett praises Abel: “CEO choice 100% successful”

Buffett took the microphone again from his seat, once more praising Abel. 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.”

8:50 PM Buffett praises Apple CEO Cook

Buffett invited the soon-to-depart Apple CEO Tim Cook to stand and acknowledge, echoing Berkshire’s own leadership transition 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 and delivered 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. In fact, this investment was entrusted to Tim, who turned it into a pre-tax return of about $185 billion.

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

10:00 PM Abel explains financial report

Abel stated that, with increasing competition, the insurance market is “becoming more relaxed.” Auto insurance customers are experiencing unprecedented price comparisons.

10:20 PM Abel refuses to follow the trend of betting on AI, continuing Buffett’s investment philosophy

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

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

Abel stated that Berkshire will deploy AI in a focused, value-creating manner, and also pointed out the potential risks to “humans,” with the company maintaining high vigilance.

10:40 PM Abel believes data center construction will bring huge growth to utilities

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

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

From the peak load of data centers—that is, actual electricity consumption—currently about 8%. Industry insiders generally aim for 5% to 10%, and we’ve already reached 8%. Therefore, we expect this ratio to increase by 50% or more over the next five years on this basis.

Abel stressed that isolating data center power costs from regular grid users and ensuring that the electricity-consuming companies bear the costs themselves is crucial. “Large-scale 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 caused by data centers has become a focus of environmental and consumer rights advocacy groups.

10:50 PM Pre-fab home builder Clayton impacted by interest rates

Abel said Clayton Homes, a prefab home builder, is under pressure, as potential homebuyers face high mortgage rates and other challenges. This is clearly driven by current interest rate levels. Consumers also face some other difficulties.

Abel said the company’s goal is to provide “affordable housing for American consumers,” which drew warm applause from the audience.

11:05 PM The first question in Q&A: Buffett’s question—why hold Berkshire long-term?

Shareholders unexpectedly learned a vivid lesson about AI risks at this annual meeting. At the start of the Q&A, Abel played a video showing a familiar face.

On the big screen, a person dressed in a suit, “Buffett,” introduces himself and asks 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, I lack nothing except time and cherry cola. I want to know—just to tell my shareholder friends—why they should hold Berkshire 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 operational freedom. “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, and 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 video of Buffett highlights the cybersecurity risks driven by AI:

It’s a good warning for our team. It’s a major risk that runs through Berkshire and that we deal with every day.

Berkshire will focus on using technology to identify cyber threats, especially in the insurance sector.

Abel also specifically stated that the production of this deepfake Buffett video was done without the participation or authorization of the “Omaha Prophet” himself.

The first real Q&A question: Given current AI tools, where does human judgment still hold a competitive advantage for Berkshire?

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

Currently, we see AI used as a productivity tool, a mechanism to reduce labor costs and perform routine, repetitive tasks. I don’t believe AI can yet make decisions on pricing, claims, and other areas requiring judgment. That will take many years.

Moreover, I tend to be skeptical. If someone tells me they can solve that problem, I’d be surprised. So, if you expect 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 we had already discussed.

Then they quickly mentioned how, in the entire insurance business and in our very focused approach to building and managing code, they could improve 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 fast, focusing on those big risks, but also using technology to see other risks quickly. We might then focus on another 15 risks, with strong judgment.

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 our approach every day. We recognize that we hold a large amount of cash and U.S. Treasuries—an important asset. I see this cash as an asset, a huge opportunity. When you feel an 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 opportunity’s trajectory. We also go further—we will hold these investments forever.

So, we think: we want a strong view 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 know it fits our principles, then, as I said before, we act decisively, quickly, and with large capital.

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 an 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, will 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, and emphasized a long-term commitment to these companies. Besides the core holdings, Abel also pointed out other significant investments, including Bank of America, Chevron, and Alphabet. Berkshire bought about $4 billion worth of Alphabet shares in Q3 2025.

Abel said he will take a more proactive role in managing the portfolio, making timely additions or adjustments. He added that he is “working full force” with Buffett on investment decisions.

Abel: I’ve managed 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. But 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 I will spend some time on these businesses, ensuring capital is allocated reasonably, risks are considered, and operational excellence is encouraged. Because, look, as an internal business person, it’s easy to look at your 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 the value we can bring in operations.

I’ve mentioned giving Adam Wright more responsibilities, or him taking on more roles across 32 businesses. He will bring excellent operational knowledge, and we also have the insurance team.

Now, regarding the stock portfolio and time allocation. We see huge opportunities in deploying capital from 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 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 these companies. 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 $85 billion. Plus, other Berkshire investments like Bank of America, Chevron, Google, and another $70 billion or so. This shows 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 absolutely collaborate and discuss. You don’t need to talk about them every day, 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 reported earnings in the past 48 hours, and Warren and I discussed their results and what we see there yesterday morning. So, these are core, but that doesn’t mean we shelve them or they are just part of our ongoing focused investments.

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

As we’ve said, deploying this cash and U.S. Treasuries at the right time is a very significant opportunity, including in stocks, operational businesses we might see, and insurance.

Regarding time allocation, yes, we will spend some time on operations, prioritizing 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. Then, continuously evaluate what other opportunities are out there—whether acquiring a private or public company outright, or considering incremental ownership in a company we want to own. These are evaluated similarly, based on our economic outlook. And closely related to the previous answer.

Jain: I really believe 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. He said: “A good capital allocator will become a good operator, and vice versa.”

Abel: When you consider our operating companies, I mentioned before that we have very deep talent reserves. We have outstanding operators who understand their businesses. They know their industries, their customers. Yes, we can still improve—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 our capital allocation approach, understanding risks, and whether we’re aware of those gaps.

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 Buffett’s decades-long track record that has set a standard?

Abel: Returning again to our capital allocation approach and our long-term philosophy, it aligns very closely with our owners and shareholders present here. They have adopted a very long-term approach to investing. We are 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 again, giving us opportunities to act. 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. 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, and we evaluate that. I want to say, when you think about the world, that doesn’t mean there are dozens of such companies, but they do exist. But relative to the opportunity, the company’s economic outlook, and the price of associated risks, we’re not interested in buying those companies at that price, 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 really comes back to discipline.

You asked how I personally balance patience and action. Again, this aligns with my role, and 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, has deep understanding and passion for Berkshire. 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 aside, it’s really tough to sit there doing nothing while others are being swept up by brokers and taken to London. I think the real test of success in insurance, and also in investing, is the ability to say “No.”

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

When asked when and how Berkshire will provide insurance for ships crossing the war-torn Strait of Hormuz, Berkshire’s Vice Chairman of Insurance Ajit Jain gave a concise answer: “Simply put, it depends on the price.” As he finished, applause and laughter erupted on the spot.

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 US, Iran, and others. “We have participated on a small scale in a plan to underwrite ships in the Strait, but no policies have been issued so far.”

Jain said 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 conditions and U.S. Navy escort guarantees—we have provided what we believe is an acceptable underwriting price. But there’s no real progress yet.”

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

Question: How do you manage Warren Buffett’s established 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, their economic outlooks. 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 concentrated portfolio, but you know, their businesses will evolve, risks will emerge. So, we will continue to evaluate it, 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, noting that Warren’s investment in Apple wasn’t because it’s a tech stock. He saw what the product is and how consumers value it. It’s an extraordinary perspective, but also one I think 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 discuss it more broadly, we review and ask ourselves: do we understand its value and why the product is 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. Very fortunate that we can discuss other potential opportunities, bringing different skill sets. But ultimately, we’ll narrow down quickly, identify what the opportunity is, why it’s valuable, why consumers or users in that industry, why that company and product can be durable. And then, related to that, where are the 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 are very confident in our clear view, and we’re satisfied with our current position.

The seventh question: Jain and succession planning for insurance, Abel’s successor 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 perform mine, our board clearly knows what actions to take.”

These two succession plans are obviously important topics. Jain joined Berkshire in 1986, and he is 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 was to gather the top five managers of our insurance business, sit down, and discuss operations 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 that Jain emphasizes.

Maintaining a disciplined culture is challenging. In insurance, telling an underwriter used to active underwriting 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 well-thought-out 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 under my supervision have been together for over 35 years. Compensation is fixed salary, not a complex formula that gives individuals upside at Berkshire’s expense. 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 in it,” and it might take years for him to realize. Plus, employees who lose want to renegotiate, and those who win are happy to walk away with everything. It’s a huge challenge.

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

When asked when and how Berkshire’s utility companies will eliminate fossil fuels, switch to renewable energy, and stop causing irreversible damage to the environment and future generations, Abel responded succinctly: “We operate as stewards of these assets, serving our states and customers. First and foremost, we must comply with current laws, including federal laws. Our team is committed to compliance and doing things right. We have plans for resources and timing to phase out 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.”

He cited Iowa’s utility as an example: about 93% of its energy comes from renewables, leading nationally, and at affordable costs. But they still operate coal plants, needed for system stability 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 pressure on the system and the entire industry.

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

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

Accompanying Abel are BNSF CEO Katie Farmer and NetJets CEO and Consumer Goods & Retail President Adam Johnson.

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 Iran conflict and Middle East tensions, I see our team taking the same attitude: this is the current reality. 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’s input costs have actually doubled in a short period. Over time, prices will adjust based on our contracts, and the situation will rebalance. In terms of operations, we’re really just working hard and managing everything 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 increased demand. The largest part of our 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, affecting 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 this impact ripple through our business.

NetJets CEO and Consumer Goods & Retail President 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 indeed 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 necessary. But it’s definitely affecting some retail and consumer goods sectors.

The tenth question: How does Berkshire’s decentralized model operate? How does BNSF stay competitive?

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? How will BNSF maintain its competitive edge against rivals and new technologies?

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

But decentralization doesn’t mean we’re not responsible. 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 the profitability gap with competitors are critical.

Our top priority in 2025 was improving train efficiency. Improving the single-car network frees resources, creates capacity, and allows fewer assets to handle more freight. In Q1, we moved 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, developing 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 used to operate a train with five people; now most trains have only two. But we still need to be allowed to innovate and need supportive regulations to compete with trucks.

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

From there, 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.

11:50 PM The eleventh question: Impact of tariffs on the 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 of 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 find ways to serve customers, either through direct contracts or through products we produce that recover these tariffs. Our team is doing a great job handling this. There are many issues to clarify, and we’re not actively seeking these.

BNSF CEO: No compensation is planned, but I’ll say a few words about tariffs. In early 2025, we saw some customers ship early before tariffs took effect, increasing freight volume. Then, in late 2025, it stabilized, and by 2026, our customers had adapted and adjusted to tariffs. That said, it does bring some uncertainty. From a planning perspective, it’s very difficult for our customers, causing some capital to hold back on manufacturing investments. The uncertainty of tariffs is the 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 compared to 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 dealt with tariffs for 100 years.” Think about the past seven or eight years—dealing with the 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 position is quite good.

The twelfth question: Berkshire’s decentralized model—how is it managed? How does BNSF stay competitive?

Question: Berkshire’s system relies on decentralization. Each manager as CEO manages their subsidiary. Which units need more oversight, and how do you handle underperforming managers? How will BNSF maintain its competitive advantage against rivals and new tech?

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

But decentralization doesn’t mean we’re not responsible. Autonomy means accepting responsibility and pride in doing things right. We have high expectations—are they managing risks? Are they acting as chief risk officers? Are they good at allocating capital? If performance is poor or decisions are bad, that’s when we intervene and discuss.

BNSF CEO: We know that continuing to operate efficiently, maintaining competitive costs, and narrowing the profit gap with competitors are essential.

In 2025, our top priority was improving train efficiency. Improving the single-car network frees resources, creates capacity, and allows fewer assets to handle more freight. In Q1, we moved more freight than last year’s Q1, with 260 fewer locomotives.

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

Regarding competition with trucks, we have the largest intermodal network among railroads. We used to operate trains with five people; now most have only two. But we need permission to innovate and supportive regulations to compete with trucks.

NetJets CEO: I returned on June 1, 2015. I asked: how many truly understand our business from both ends? NetJets is complex;