Berkshire CEO Greg Abel: AI data centers are a 'significant opportunity' for Iowa

Berkshire Hathaway CEO Greg Abel says the company is betting big on artificial intelligence, and Iowa is right in the middle of it. In a live CNBC interview from Tokyo, Abel outlined two ways Berkshire plans to profit from the AI boom: selling power to data centers and its massive investment in Google parent Alphabet.

Abel's comments carry special weight for Iowans. Berkshire's utility arm, Berkshire Hathaway Energy, operates a substantial power grid in the state, and data centers already account for about 8 percent of its Iowa electricity load. Abel says that number is growing.

What did Abel say about AI and data centers in Iowa?

Abel told CNBC's Becky Quick that providing energy to AI data centers is a “significant opportunity for Berkshire and Berkshire Hathaway Energy.” He has long believed that the biggest constraint on AI's expansion is simply having enough power to run the facilities.

But he made one thing clear: Berkshire will only sell energy to hyperscalers, the giant tech companies building data centers, if it does not hurt other customers. “We are interested in serving these hyperscalers if there was no impact to the rates of our other customers,” Abel said. “In fact, we've pretty much taken the approach there has to be a net benefit to our customers.”

In Iowa, Abel pointed out that data centers have provided “very, very substantial” property tax relief for residents and brought in revenue that supports schools, police, and fire departments. He argued that a data center has to be a “welcomed member of the community.”

Why is Berkshire investing billions in Alphabet?

The second path is Berkshire's nearly $36 billion stake in Alphabet, the parent company of Google. Warren Buffett initiated the position last year, and Abel said the decision came from seeing AI's impact firsthand inside Berkshire's own companies.

“We knew it was going to have a significant impact on America and businesses,” Abel said. “We saw Google as a significant player.”

Abel also revealed new details about a $10 billion direct purchase of Alphabet stock this spring. He got a call on a Sunday morning in late May offering Berkshire a chance to participate in a large equity offering. After a quick conversation with Buffett, they agreed to buy $10 billion at a 6.5 percent discount.

How does Abel view the pushback against data centers?

Abel acknowledged that opposition to data center construction is growing across the country. “There is a lot more pushback in the communities across the U.S.,” he said.

He urged companies to “seriously evaluate” community concerns and use technologies that minimize water use. In Iowa, he said, the benefits are clear: lower property taxes and stronger local services.

“The tax relief, specifically on property taxes, and also revenues that come into the county to support other services, schools, police, fire. It's very, very substantial,” Abel said.

What about Japan and rising interest rates?

Abel spoke from Tokyo, where he visited Berkshire's tool-making unit Tungaloy and met with executives from the five Japanese trading houses in which Berkshire holds stakes. He said none of them raised rising Japanese interest rates as a “fundamental challenge right now.”

Japan's 10-year bond yield recently topped 3 percent, its highest level in 30 years. But Abel noted rates are “still relatively modest” compared with the U.S. 10-year yield near 4.8 percent. Berkshire will continue issuing yen-denominated bonds as needed, he said, and expects to hold its Japanese investments “for many decades.”

What is Berkshire's outlook on housing?

Abel said he does not see “any type of immediate recovery” for U.S. homebuilders, calling the road ahead “bumpy.” But he expects Berkshire's newly acquired Taylor Morrison to be a “very strong asset” five to 10 years from now.

“The American dream will continue to exist,” Abel said.

What does this mean for Iowa?

For Iowans, the takeaway is clear: Berkshire sees the state as a key piece of its AI strategy. Data centers are already a major part of the local economy, and more are coming. The question is whether communities will welcome them.

Abel's message to both companies and communities: work together, and the benefits can be substantial.

Frequently asked questions

How much energy do data centers use in Iowa?

Data centers account for about 8 percent of Berkshire Hathaway Energy's electricity load in Iowa, and that share is expected to grow as new facilities come online.

Will data centers raise electricity rates for Iowa residents?

Abel says Berkshire will only serve hyperscalers if there is no negative impact on other customers' rates. He emphasized that there must be a net benefit to existing customers.

What tax benefits do data centers bring to Iowa communities?

Data centers provide substantial property tax relief for residents and generate revenue that supports local services like schools, police, and fire departments, according to Abel.