($) Greg Abel Will Power AI
MidAmerican Energy, Iowa, and AI are intimately intertwined
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During the Berkshire Hathaway annual meeting last weekend, Warren Buffett made a lot of headlines on AI. By comparing AI to nuclear weapons and sounding the alarm on deepfakes by talking about how he was almost fooled by a deepfake of his own likeness, his commentary would put him squarely into the “AI doomer” camp.
As I shared in my recently published Q1 performance letter, I listen to Berkshire annual meeting Q&A’s mostly as a meditative exercise, not for specific market or industry analysis. Yet, if you listen closely to commentaries shared by people other than Buffett, it’s clear that the Berkshire empire will be a key player powering AI’s growth in the next decade. Here is what Buffett’s successor and chair of Berkshire Hathaway Energy (BHE), Greg Abel, said when answering a question about utilities regulations in Utah:
“...if we look at the demand that’s in place for MidAmerican Iowa Utility over the next, say, into the mid 2030s associated with AI and the data centers, that demand doubles in that short period of time, and it took 100 years plus to get where we are today, and now it’s going to double.
And that will require substantial amounts of capital from MidAmerican and its shareholders.”
Since MidAmerican Energy is a subsidiary of BHE and BHE is of course a major part of Berkshire, those “shareholders” whom Abel mentioned are Berkshire shareholders. While the investment world hem and haw about what Buffett will do with his $189 billion cash pile, it’s rather obvious that a good chunk of that pile will be poured into expanding MidAmerican Energy’s capacity – do in the next 10 years, what it did in the last 100 years.
The unlikely intersection between MidAmerican, Iowa, and AI supercomputers deserves more unpacking. GPT-4 was trained in the Azure supercomputer data center west of Des Moines, the capital of Iowa. If we take the personification of AI to the comical extreme, you can say ChatGPT is an “Iowan.”
So what’s so special about Iowa in the context of AI? And what role will MidAmerican play in fueling AI advancement in the next 10 years?