Warren Buffett is not known for its technological investment. But at present, two of its most important positions benefit from the growing demand for artificial intelligence (AI). Most people do not consider these companies as IA companies, but when you are widening more deeply, few companies benefit as much from the AI revolution as these two Buffett actions.
This company feeds the AI revolution
Few companies are also directly exposed to the growing demand for AI as Amazon (Amzn -3.92%)). To understand why, zoom in and look at the AI industry.
It is very unlikely that the current AI revolution would take place without the massive quantity of cloud infrastructure distributed in the world in the last decade. Indeed, development, training, then the execution of AI services generally requires an enormous amount of computing power. Without cloud infrastructure, each AI company should create its own infrastructure, adding considerable expenses. This would mean that only the largest companies could afford to develop AI solutions, considerably limiting innovation.
Cloud computing also allows end users to adopt AI more easily. According to Oracle“The cloud becomes the essential way to integrate AI into commercial applications.” Just as the cloud infrastructure facilitates the reduction in calculation power, it is also easy to consume modular AI services.
The critical role of the cloud networks for AI simply does not disappear so soon. This is great news for Amazon, given its Amazon Web Services (AWS) division has a global market share of 31% for cloud infrastructure. It is almost as much as the following two competitors.
With a solid lead on competition, expect AWS to develop in tandem with the global AI industry, offering a direct advantage to Amazon shareholders as Buffett, whose portfolio company has 10 million shares worth around 2.2 billion dollars.
Apple is secretly the king of artificial intelligence?
Regarding AI, Apple (AAPPL -7.28%)) is not an obvious choice. The company specializes in the production of equipment such as imacs, macbooks and iPhones, not specialized AI software. Of course, Apple has its Siri and Apple Intelligence platforms which offer AI features to its equipment users. But the company barely resembles a full AI company.
This understanding, however, is wrong, because it does not consider Apple’s dominant position in the value chain.
Many of you read it has an iPhone. If you subscribe to an AI service like Chatgpt, around 15% to 30% of these costs you pay goes to Apple. Indeed, Chatgpt can be downloaded from iPhones via the App Store, which apple control.
If you use Chatgpt on an iPad, Imac or MacBook and you have downloaded the application via the App Store, these subscriptions also make Apple money directly.
According to The penis“Apple would expect the chatbots and LLMs to start people temptation to use traditional search engines.” This could result in the explosion of the request for IA chat services. If these services are consumed using Apple products, Apple will be able to take advantage of the AI revolution, even without introducing new products or services of AI itself.
This is all good news for Buffett, of which Holding has 300 million Apple shares worth around $ 75 billion – its greatest position from afar. Investors who seek to bet on the AI revolution in a more intelligent way than the purchase of AI or infrastructure actions should give Apple a difficult aspect.
John Mackey, former CEO of Whole Foods Market, a subsidiary of Amazon, is a member of the board of directors of Motley Fool’s. Ryan Vanzo has no position in the actions mentioned. The Motley Fool has positions and recommends Amazon, Apple and Oracle. The Motley Fool has a policy of disclosure.
