Warren Buffett isn’t known for his tech investing. For decades, he famously avoided the sector. This caused him issues during the dot-com bubble when tech stocks were soaring in value. But when that bubble popped, Buffett looked like a genius.
In recent years, artificial intelligence (AI) stocks have led the market higher. Many of the world’s most valuable companies are heavily exposed to AI tailwinds. This time around, however, Buffett isn’t sticking to the sidelines. In fact, he has several multibillion-dollar bets on AI’s growth.
Right now, Buffett’s holding company, Berkshire Hathaway, has several big investments in companies that are exposed to the AI revolution. Interestingly, none of these are pure plays on AI. That is, Buffett isn’t necessarily betting on AI directly through these investments. Instead, he has allocated capital to businesses that generate most of their revenue from other sources, but undoubtedly have a ton of exposure to AI.
Consider Berkshire’s investment in Apple (NASDAQ: AAPL). This is currently Berkshire’s largest publicly traded position, with a value of around $75 billion. Apple, of course, generates most of its revenue by selling consumer devices like iPhones, iMacs, MacBooks, and iPads. But the company also has a smaller yet growing segment of revenue tied to services. Services revenue has been steadily increasing, from 19.8% of sales in 2022 to 24.6% of sales in 2024.
What exactly does services revenue comprise? Much of it comes from its App Store, but there’s also a long tail of revenue streams from things like licensing, Apple Care, and third-party subscriptions. Many of these streams are directly exposed to the rise of AI. As of last month, ChatGPT had over 400 million users, many of whom use iPhones to access the app. Premium subscribers pay for their subscriptions using Apple’s App Store, generating direct revenue for the company.
But Apple is benefiting from AI in non-revenue-generating sources as well. Its Siri voice assistant recently experienced a large upgrade, and Apple Intelligence has been rolled out to most of its newer devices. These features increase the attractiveness of its hardware, indirectly generating more revenue for the company.
Another one of Buffett’s AI bets is Amazon (NASDAQ: AMZN). Berkshire currently owns around $2.2 billion in Amazon shares. Just like Apple, Amazon’s main focus isn’t AI, but there’s no doubt that the company has a heavy exposure to that growth industry.