Warren Buffett says AI may be better for scammers than society. And he's seen how
Michelle King of San Francisco does yoga in the See’s Candies booth before the arrival of shareholders for the Berkshire Hathaway annual meeting on Saturday, May 4, 2024, in Omaha, Neb. (AP Photo/Rebecca S. Gratz)
OMAHA, Neb. (AP) — Warren Buffett cautioned the tens of thousands of shareholders who packed an arena for his annual meeting that artificial intelligence scams could become “the growth industry of all time.”
Doubling down on his cautionary words from last year, Buffett told the throngs he recently came face to face with the downside of AI. And it looked and sounded just like him. Someone made a fake video of Buffett, apparently convincing enough that the so-called Oracle of Omaha himself said he could imagine it tricking him into sending money overseas.
The billionaire investing guru predicted scammers will seize on the technology, and may do more harm with it than society can wring good.
“As someone who doesn’t understand a damn thing about it, it has enormous potential for good and enormous potential for harm and I just don’t know how that plays out,” he said.
Thousands of Berkshire Hathaway shareholders line up outside the Omaha arena where the annual meeting will be held, in Omaha, Neb, Saturday, May 4, 2024. Tens of thousands of people are expected to flock to Omaha, Nebraska, to soak up wisdom from investing wizard Warren Buffett. Saturday’s annual shareholder’s meeting for Buffett’s Berkshire Hathaway conglomerate is famous for featuring the so-called Oracle of Omaha (AP Photo/Josh Funk)
EARNINGS BEFORE MUSINGS
The day started early Saturday with Berkshire Hathaway announcing a steep drop in earnings as the paper value of its investments plummeted and it pared its Apple holdings. The company reported a $12.7 billion profit, or $8.825 per Class A share, in first the quarter, down 64% from $35.5 billion, or $24,377 per A share a year ago.
But Buffett encourages investors to pay more attention to the conglomerate’s operating earnings from the companies it actually owns. Those jumped 39% to $11.222 billion, or $7,796.47 per Class A share, led by insurance companies’ performance.
Harold and Caroline Ernst of St. Louis chat with fellow shareholders as they wait for the Berkshire Hathaway annual meeting to begin on Saturday, May 4, 2024, in Omaha, Neb. (AP Photo/Rebecca S. Gratz)
None of it that got in the way of the fun.
Throngs flooded the arena to buy up Squishmallows of Buffett and former Vice Chairman Charlie Munger, who died last fall. The event attracts investors from all over the world and is unlike any other company meeting. Those attending for the first time are driven by an urgency to get here while the 93-year-old Buffett is still alive.
“This is one of the best events in the world to learn about investing. To learn from the gods of the industry,” said Akshay Bhansali, who spent the better part of two days traveling from India to Omaha.
A NOTABLE ABSENCE
Devotees come from all over the world to vacuum up tidbits of wisdom from Buffett, who famously dubbed the meeting ‘Woodstock for Capitalists.’
But a key ingredient was missing this year: It was the first meeting since Munger died.
The meeting opened with a video tribute highlighting some of his best known quotes, including classic lines like “If people weren’t so often wrong, we wouldn’t be so rich.” The video also featured skits the investors made with Hollywood stars over the years, including a “Desperate Housewives” spoof where one of the women introduced Munger as her boyfriend and another in which actress Jaimie Lee Curtis swooned over him.
Daegwon Kim of South Korea, who arrived in line at 3:30 a.m., takes photos of the crowd behind him outside the Berkshire Hathaway annual meeting on Saturday, May 4, 2024, in Omaha, Neb. (AP Photo/Rebecca S. Gratz)
As the video ended, the arena erupted in a prolonged standing ovation honoring Munger, whom Buffett called “the architect of Berkshire Hathaway.”
Buffett said Munger remained curious about the world up until the end of his life at 99, hosting dinner parties, meeting with people and holding regular Zoom calls.
“Like his hero Ben Franklin, Charlie wanted to understand everything,” Buffett said.
For decades, Munger and Buffett functioned as a classic comedy duo, with Buffett offering lengthy setups to Munger’s witty one-liners. He once referred to unproven internet companies as “turds.”
Together, the pair transformed Berkshire from a floundering textile mill into a massive conglomerate made up of a variety of interests, from insurance companies such as Geico to BNSF railroad to several major utilities and an assortment of other companies.
Munger often summed up the key Berkshire’s success as “trying to be consistently not stupid, instead of trying to be very intelligent.” He and Buffett also were known for sticking to businesses they understood well.
Berkshire Hathaway shareholders pose with a cutout poster of CEO Warren Buffett Friday, May 3, 2024, in Omaha, Neb., inside the exhibit hall in Omaha where Berkshire companies sell their products. Buffett will spend hours answering questions at the meeting Saturday. (AP Photo/Josh Funk)
“Warren always did at least 80% of the talking. But Charlie was a great foil,” said Stansberry Research analyst Whitney Tilson, who was looking forward to his 27th consecutive meeting.
NEXT GEN LEADERS
Munger’s absence, however, created space for shareholders to get to know better the two executives who directly oversee Berkshire’s companies: Ajit Jain, who manages the insurance units; and Abel, who handles everything else and has been named Buffett’s successor. The two shared the main stage with Buffett this year.
Berkshire Hathaway shareholders pose with the mascot for one of its companies, Oriental Trading, while the more famous spokeslizard for Geico insurance looms over their shoulder, Friday, May 3, 2024, in Omaha, Neb. CEO Warren Buffett will spend hours answering questions at the meeting on Saturday. (AP Photo/Josh Funk)
The first time Buffett kicked a question to Abel, he mistakenly said “Charlie?” Abel shrugged off the mistake and dove into the challenges utilities face from the increased risk of wildfires and some regulators’ reluctance to let them collect a reasonable profit.
Morningstar analyst Greggory Warren said he believes Abel spoke up more Saturday and let shareholders see some of the brilliance Berkshire executives talk about.
“Greg’s a rock star,” said Chris Bloomstran, president of Semper Augustus Investments Group. “The bench is deep. He won’t have the same humor at the meeting. But I think we all come here to get a reminder every year to be rational.”
Valerie Deichert of Omaha, left, assists shareholders with their purchases from the Oriental Trading booth during the Berkshire Hathaway annual meeting on Saturday, May 4, 2024, in Omaha, Neb. (AP Photo/Rebecca S. Gratz)
A LOOK TO THE FUTURE
Buffett has made clear that Abel will be Berkshire’s next CEO, but he said Saturday that he had changed his opinion on how the company’s investment portfolio should be handled. He had previously said it would fall to two investment managers who handle small chunks of the portfolio now. On Saturday, Buffett endorsed Abel for the gig, as well as overseeing the operating businesses and any acquisitions.
Bart Macdonald of New York City takes photos of the BNSF Railway model train display during the Berkshire Hathaway annual meeting on Saturday, May 4, 2024, in Omaha, Neb. (AP Photo/Rebecca S. Gratz)
“He understands businesses extremely well. and if you understand businesses, you understand common stocks,” Buffett said. Ultimately, it will be up to the board to decide, but the billionaire said he might come back and haunt them if they try to do it differently.
Overall, Buffett said Berkshire’s system of having all the noninsurance companies report to Abel and the insurers report to Jain is working well. He himself hardly gets any calls from managers anymore because they get more guidance from Abel and Jain.
“This place would work extremely well the next day if something happened to me,” Buffett said.
Nevertheless, the best applause line of the day was Buffett’s closing remark: “I not only hope that you come next year but I hope that I come next year.” ___
See’s Candies associates, including Holly Pellicano of San Francisco, center, do yoga together before shareholders arrive for the Berkshire Hathaway annual meeting on Saturday, May 4, 2024, in Omaha, Neb. (AP Photo/Rebecca S. Gratz)
For more AP coverage of Warren Buffett look here: https://apnews.com/hub/warren-buffett. For Berkshire Hathaway news, see here: https://apnews.com/hub/berkshire-hathaway-inc. Follow Josh Funk online at https://www.twitter.com/funkwrite and https://www.linkedin.com/in/funkwrite.
Berkshire Hathaway Vice Chairman Greg Abel poses with shareholders Friday, May 3, 2024, in Omaha, Neb. Abel is set to be the next CEO after Warren Buffett is gone. (AP Photo/Josh Funk)
Jennifer Cua of Las Vegas sits with her purchases from Squishmallows during the Berkshire Hathaway annual meeting on Saturday, May 4, 2024, in Omaha, Neb. (AP Photo/Rebecca S. Gratz)
Shareholder Tina Schmidt of Cozad, Neb., wears a shirt with Warren Buffett’s portrait in the style of an Andy Warhol painting at he Berkshire Hathaway annual meeting on Saturday, May 4, 2024, in Omaha, Neb. (AP Photo/Rebecca S. Gratz)