Since Berkshire has been transformed into the GOOGL board lately (which I am not opposed to as a long-time Google owner), I am posting this snippet from Ben Thompson that discusses both Berkshire and Google ;-)

One of the businesses Berkshire Hathaway used the See’s profits for was on the opposite end of the spectrum in terms of capital utilization: BNSF Railway. Railways require a lot of capital to operate...they also make a lot of money: BNSF’s net income was $5.5 billion on revenue of $23.4 billion (end of 2025). To put that in perspective, the total amount that Berkshire Hathaway has made from See’s Candies is probably less than $3 billion (the last disclosure was “over $2 billion” in 2019), i.e. less than BNSF made last year...

In fact, you can make the case that Abel is actually just replaying Buffett’s strategy, only this time Berkshire Hathaway is See’s Candies, and Google is BNSF. At the end of last quarter Berkshire Hathaway had $373 billion in cash, and $25 billion in free cash flow in 2025. How many companies could actually employ that cash in a way that generated a high rate of return?

It’s hard to imagine a better option than Google. The company is not only investing in AI, but has optionality in terms of outcomes: its Services business benefits from the investment, it is in contention at the model layer with Gemini, and it can sell capacity to the frontier labs. Moreover, that capacity has a sustainable cost advantage because of TPUs, which means that in a world where compute becomes a commodity — as hard as that is to imagine right now — Google is the hyperscaler that is poised to make the most profit.

Notice that I didn’t say margin; if that were Google’s concern they would almost certainly be making different choices. Profit, however, is an absolute number, and Google is bringing everything to bear — first its cash flow, then its debt, and now its equity — on making money from the infrastructure build-out.

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