While others are burning money on AI, Google is using the money it earns from search and advertising to fund AI—that may be what Berkshire Hathaway truly sees in it.

Buffett has finally made a major bet on Google, and the purchase immediately made it Berkshire Hathaway’s third-largest holding.
The latest 13F shows that Berkshire increased its Alphabet stake by 83% in the second quarter, from 57.8 million shares to nearly 106 million shares, worth approximately $37.8 billion—behind only Apple and American Express.
In one sentence: Berkshire Hathaway, which has long focused on “understandable businesses and cash flow,” is now treating Google as a core asset rather than merely a test position in a tech stock.
More interestingly, Buffett himself has explicitly said that investing in Alphabet was initially his idea. In the second quarter, Berkshire bought a total of $23.5 billion in stocks and sold $3.7 billion, ending a streak of 14 consecutive quarters of net selling.
What is really worth watching is not that “Buffett has also started chasing AI.” Alphabet’s most distinctive feature is that it already has cash machines such as Search, YouTube, and Cloud; Gemini and AI infrastructure are now simply adding another layer to its existing business empire.
That is different from many pure-play AI companies: others burn money first and wait for a business model, while Google is using its existing cash flow to bet on the next-generation gateway.
Of course, the risk is also straightforward. If AI capital expenditures continue to soar but Gemini ultimately fails to significantly drive up revenue from Search, Cloud, and enterprise customers, the market will reassess today’s huge investments all the same.
So I would rather interpret Berkshire’s increased position this time as a bet not on the “AI concept,” but on Google’s ability to use its existing cash flow to endure the entire AI arms race.
The real question now is—did Buffett buy an undervalued tech giant, or the next AI gateway?
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