Warren Buffett compared artificial intelligence development to that of the nuclear bomb and predicted AI scams would become the largest “growth industry” of all time.
The 93-year old investor spoke hours after it was revealed that his multinational Berkshire Hathaway had sold its large Apple stake over the last three months. This led to a drop of $40 billion in its value.
The “Oracle of Omaha”, who was present at the annual Berkshire shareholder meeting where over 10,000 people attended what is described as Woodstock of capitalists, recalled feeling “nervous” when he saw an AI-generated picture of himself.
He said, “It wasn’t me. It was my voice. And it was wearing clothes that I wear. It was delivering an message that in no way came from myself.” He admitted that AI has “potential for good things as well,” but joked that he might have been fooled into sending money to an AI-generated version.
Scamming is a part of American culture. “If I were interested in investing in the scamming industry, it would be a growth industry for all time.”
Buffett, who previously acknowledged AI’s “amazing capabilities” when testing OpenAI’s ChatGPT, expressed his fear that it was already too late to stop its advancement. “We let the nuclear weapon genie out when we created it, and this genie has been doing terrible things recently.
AI is similar. The bottle is almost empty. It is extremely important and someone has to do it. “We may wish that we never saw the genie or it could do wonderful things.”
Apple has not yet announced how AI will be integrated into iPhones. Samsung, Apple’s main rival, has already released phones with AI features, such as generative AI chatbots.
Tim Cook, chief executive of the California-based firm, said that he is “very bullish about generative AI”. He added: “We are making significant investments.” “We look forward to sharing some exciting things.”
Documents released by Berkshire before the extensive question and answer session at Omaha, Nebraska showed that Berkshire’s stake in iPhone giant is now valued at $135.4 billion compared to $174 billion just three months ago. A part of this is due to a roughly 11 per cent drop in the share prices during that period, amid concerns about Apple’s sales.
This is the second consecutive quarter that the conglomerate has decreased its Apple stake. Berkshire owns approximately 5.9% of Apple.
Buffet’s massive investment in Apple since 2016 has always been a source of amazement for observers. Buffet is said to be a philanthropist who decided to invest so much in Apple when he learned that its customer retention rate was 95%. When asked why he was an Apple fanatic last year, he replied: “I don’t really understand the phone but I understand consumer behavior.”
Buffett assured shareholders that for the moment, his Apple holding will not change. Apple will remain our biggest investment, Buffett said. “Unless something dramatic occurs that changes the capital allocation,” he added.
Apple’s iPhone sales dropped by 10% last week, its largest drop since the Covid-19 pandemic began. The sales for the period January to March 2024 are 10 percent lower than last year. The company’s shares rose by nearly 7 percent despite the decline in sales. Investors had expected an even bigger drop.