Berkshire’s New CEO: Greg Abel 3/5/26

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0:58Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod. Succeeding the great Warren Buffett. The shoes to fill are tough on all fronts. Greg Abel, the new CEO of Berkshire Hathaway, joins us for his first major interview since taking over from the Oracle of Omaha on January 1st. Abel on the Berkshire Company's investment portfolio and the$370 billion plus cash pile. We really view that as an opportunity. Plus, in a move befitting Buffett himself, this new CEO isn't too concerned about his paycheck. So you're basically taking all of your take-home pay and putting it into shares at Berkshire. Yes, and the why is really important.

1:39Big shoes to fill and a big promise. I'm committed to doing this every year. Your entire salary? My entire salary, as long as I'm the CEO. All that and more coming up today. It is Thursday, March 5, 2026. Squawk Pod begins right now. Good morning, everybody. Welcome to Squawk Box right here on CNBC. I'm Becky Quick along with Joe Kernan and Andrew Ross Sorkin. Andrew, good morning. It's good to see you. Good morning from Washington, D.C., but you can't tell right now because it's like foggy bottom behind me. This is typically where you see the Capitol right behind us. You know this shot. Wow. Joe was just sitting in this chair before, I think, about a week and a half ago.

2:21And here we are in, oh, anyway, maybe the fog will go away. We'll take your word for it. Hopefully it's there. We didn't miss anything. Yeah. The clerk will report. Senator from Virginia, Mr. Cain, moves to discharge SJRES 104 to direct the removal of United States Armed Forces from hostilities within or against the Islamic Republic of Iran that have not been authorized by Congress from the Committee on Foreign Relations. Mr. President. Senator from Virginia. I ask for the yays and nays. Mr. Johnson, no. Mrs. Capito, no. On this, the yeas are 47, the nays are 53. The motion to discharge is not approved.

3:01The Senate voting down an effort to stop America's involvement in the Iran war. The vote on the so-called War Powers resolution was 47 in favor to 53 opposed. It was largely along party lines. Passage would have meant senators would have a say before future U.S. attacks. The House is set to vote on a resolution today. even Senator Fetterman who voted no on it, Rand Paul went the other way and voted yes on it, but the Fetterman was pointing out this is this is all for show because he has 60 days from from the beginning of before anything. So it was just done to register disapproval at this point and nothing was going to happen and it wouldn't happen anyway and it wasn't going to pass but certainly within Congress's right to do this and they've done it in the past for different for different operations it goes back the only time we've declared war in the last hundred I guess World War II was the last time there was actually a declaration of war and there were a couple of incidents with Obama guys where you still had a something that was passed after 9-11 that allowed for anyone even remotely concerned with that you could you could make the case that i still have the authority to do something like that libya uh less so and then some previous i mean think about it koreal korean war never declared the vietnam war never declared it's it's uh it is and and as it's you remember when we talked about strategic ambiguity for Taiwan.

4:38The writers of the Constitution, they said one thing in Article 1 and another thing in Article 2, and there is some ambiguity. The Commander-in-Chief has the right to command the military as he sees fit, yet Congress has to weigh in on actually declaring war. So both sides have always been able to find enough wiggle room to do exactly what's happening right now. The document has stood the test of time. Yeah. Yeah, they were pretty savvy. Or they didn't know exactly how to. Well, how can you anticipate what's going to be happening 250 years in the future? Right, right. Exactly 250. Exactly, right.

5:20All right, in the meantime, the CEO of Anthropic still trying to reach a deal with the Pentagon on use of his company's AI. The Financial Times says that Anthropic chief Dario Amodi has been speaking with an undersecretary of defense in an effort to define how the Pentagon could use the company's technology. An agreement could mean that Anthropic avoids the designation of supply chain risk. Reuters is reporting that Amodi has spoken about this situation in recent days with Amazon CEO Andy Jassy and others. Separately, in a letter that was shared with CNBC, a group of former defense and intelligence officials and policy experts called for Congress to investigate the Pentagon's decision to designate Anthropic as that supply chain risk.

6:04And without naming Anthropic, a tech industry group whose members include NVIDIA, Google and Anthropic voice concern to the Defense Department over that supply chain risk designation. In the meantime, the FT reports that OpenAI is looking to add to protections to its own agreement that was reached recently with the Pentagon. That deal has faced criticism from OpenAI employees, and CEO Sam Altman admitted that, in his words, the timing of that deal looked both opportunistic and sloppy. And there is fallout kind of on all sides of this. It's a continuing conversation. We've been having the discussion here all week on set, going back and forth about what should happen.

6:46We brought it up yesterday with Treasury Secretary Besant, just this idea. It's one step to say you're not going to use the technology. It's quite another thing to say that this is a supply chain risk, which means that defense, that anybody who's a contractor to the government can no longer use that technology as well. And there's nothing close, Sorkin? I mean, for what it's used for in this context, there's nothing. And we're still using it, right? Even though we say we're not, we still are, right? No, look, we're going to be using, The Defense Department is going to be using Anthropic, I imagine, at least for the next six months as they get offboarded and maybe onboard other models.

7:24In this particular moment, yes, Claude and the product that Anthropic provides is probably the, quote, unquote, best product. Having said that, it's possible in two months from now that the next version of what OpenAI is doing will be the best version of it. It may be that Google is the best version of it. But interestingly to me, the backlash that's happening inside OpenAI and the fact that OpenAI plans to and if already hasn't effectively requested basically the same protections that that Dario at Anthropic was requesting, I think throws this whole thing up into a question. So when you hear Treasury Secretary Besson say we can't have companies telling us what to do, well, if that's true, then why are we signing up deals with OpenAI?

8:13I think ultimately, and this is where I think Sam Altman is right, you know, you don't want effectively CEOs to be making the decisions necessarily about how and what these products can or cannot do. Having said that, you know, and you've probably heard the analogy many times, if you're going to manufacture a vehicle and it happens to have a button inside the vehicle that's under development and you know that if you hit the button, it does terrible things. You're a health care company. You create a drug that mostly does good things, but maybe does some terrible things. The question is whether you should be selling either selling that product at all or if you're going to, it should probably come with restrictions.

8:56we were talking yesterday i understand the the the you know you don't want perhaps the security of all americans being you know looked at but don't we already have autonomous weapons that we're using isn't isn't that sort of what i mean not necessarily just drones but okay so we want them and we're okay with it but we don't want them being too good I don't understand. Don't we want the best autonomous weapon? We just got to admit it. We want killing machines that work for war. And we want to give our soldiers the best things we have. Right? Sure, but the product doesn't. If the founder of the company is telling you that the product doesn't work.

9:40Well, that's a different story. That's a different story. No, that is the story. That is the story. If you talk to Dario, he will tell you that they are trying to make the product work. They want the product to work, but there are still you talk about hallucinations. You know, we have these conversations about how good or bad AI is in this particular moment. It is unclear whether the product will work the way it's supposed to work all of the time. And if you're in the business of killing other people, I would hope that you would only want to use a product in which the company could stand behind the actual product.

10:16If you believe that that component part, if you believe that that's it, there may be other reasons that you remember how many times in the past defense contractors just had this. You know, there was a backlash culturally against ever doing support. Sure. But I don't think that that's I don't think that's what's really the issue here. And first of all, I don't think that's what they're trying to make it. And I think the I know that. But I think the secondary issue and maybe it's really the first issue here is one of personalities and politics. I mean, unfortunately, that's to me where this has gotten really all bollocksed up.

10:51We're talking about supply chain risk and this and that. But ultimately, if you understand Emil Michael at the Department of War and you understand where Dario is and you look at the politics of both of those both of those folks, you look at the politics of the of the secretary of the Treasury yesterday and some of the things that have been said over the years and and and even where open AI is. It all makes a lot more sense than the underlying argument about what's allowed and what's not allowed, because effectively OpenAI is trying to do exactly what Anthropoc is doing anyway. And Andrew, I will also say earlier this week we had Alex Harstrick on with this.

11:26He is a veteran. He's now involved in investing in all sorts of defense companies and beyond. His point was that the language of Silicon Valley is so different than the language of the Defense Department and that they end up talking over each other in some ways, too. And it is easy to comment on the nomenclature difference between Silicon Valley and the military-industrial complex. So when the Pentagon talks, the Pentagon is a command and control culture. He thinks if you can boil this down and maybe get to the point where you have other intermediators who are kind of helping you talk this through, you might be able to reach some sort of agreement.

12:06And I wonder if that's why, as the FT is reporting, including Dario Modi is talking to Andy Jassy and others about exactly what this is. Well, look, the reason he's talking to Andy Jassy is Andy Jassy is one of their largest investors. That's that's why he's talking to Andy Jassy. But he also has a better idea, I think, Andy Jassy of how to talk to the government in some of these ways, too. To some degree. But but I would argue, by the way, Emil grew up in Silicon Valley. I mean, the guy who is negotiating this deal, the one who has been on Twitter saying what he's been saying about Anthropic and the like, worked at Uber.

12:42To me, this is not a conversation about people talking past each other or something else. These people know each other. They know each other and don't like each other. That's what's happening here. Well, that happens, too. So we all can agree that we want the best AI-operated autonomous weapons that we can possibly get. But we definitely don't want them like... We don't want mass surveillance. No, we don't... Right. But we don't want the weapons to be launched and then come back and hit the place they were launched. That would be bad. That would be bad. Okay. You don't want war games. We want them to work.

13:15War games, I don't know if you remember the math we brought... It's a moral question. Do you want the... I mean, think about the nuclear arsenal. Do you really want to make things like that that can never be used? Or that can be used without a human decision to be made on any... Think of the neutron bomb, leaves all the buildings. This kills people. Well, we're a business show, but these things matter. Cheese will be next. Coming up for the first time in some 60 years, Berkshire Hathaway has a new leader. CEO Greg Abel joins us for his first sit-down interview since succeeding famed investor Warren Buffett earlier this year.

13:55And he came out of the gate with an 18-page shareholder letter. No pressure. President Lincoln said, yes, this letter is very long, but I didn't have time to make it shorter. And I use that to everyone because everybody would be texting me, I'm halfway through, but so far it's going well. Squawk Pod will be right back. We believe in starting with your financial goals, not a formula. At Oppenheimer, we put the full strength of our longstanding expertise to work, understanding your life and your ambitions. and designing the precise strategies that build and protect your wealth with confidence across this generation and the next.

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14:48Never bet against American grit or American energy. Through innovation, Venture Global is not only building some of the largest energy facilities in the world right here in the United States, but delivering American energy at a fraction of the cost and a fraction of the time. So while others are busy talking, we're busy building. That's Venture Global. That's unstoppable energy.

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15:58The company has just filed a Form 4 and an 8K. And joining us to talk about those topics and his first letter to shareholders after taking the reins from Warren Buffett is Berkshire Hathaway's CEO, Greg Abel. Greg, welcome. It is great to see you this morning. It's great to be here. Good morning, Becky. Morning, Joe. Yeah, we really appreciate your coming on set. We have so much to talk about. But let's jump in with the news that is just crossing the wires, and that's what's coming from the 8K. That's the big headline here, that Berkshire Hathaway has begun repurchasing shares of the common stock under the previous policy that had been out there before.

16:36How many shares are you buying back? Why are we hearing about this? Yes. So we've had a longstanding policy that when the intrinsic value as we see it and computed on a conservative conservative basis, when it exceeds our market price, Berkshire has always acquired shares. That's been our longstanding policy. We highlighted that in the 10K and in my letter that that remained in place. and we've just recommenced yesterday. So the point being we see value, the intrinsic value exceeds the current market value and we started recommenced purchasing. And we felt it was important to communicate to our shareholders, our partners, our owners, that with the transition of leadership and that this is the first time we're purchasing shares, it was important to let them know we've recommenced.

17:30Yeah, and the last time that you had bought back shares was May of 2024. or Berkshire shareholders have long realized that it might be Charlie, maybe Warren talking to each other, kind of figuring what they thought was a fair value for the price of things. Did you talk to anybody about it or you looked at it and you thought this is a good time to be buying back? No, absolutely. Talk to Warren. So how I approached it was obviously looking at the value, having a view of intrinsic value, consulted with Warren relative to the value and the timing of is it ready to are we ready to recommence and there and the thought there was after the consultation we filed our 10k we there's a 70 uh a 48 hour cooling off period Monday and Tuesday and we commence purchasing on Wednesday morning have you been looking at this for a long time um we look at it continuously what are the three top things that would make you think that is something to the price of sales?

18:31Is it what jumps out as as as a signal that the intrinsic value is not recognized by the share price? Which thing? What we always look at is what are the economic prospects of each of our companies in Berkshire? And we look at that over the long term. Is there a gut feeling more than are there numbers where you say, OK, okay, this hit, you know, 80 % of book, this part of Berkshire or something like that. It's really just looking at the economic opportunities that exist within Berkshire. And are we comfortable that the value proposition is very strong? And we're doing it on behalf of obviously our shareholders and owners.

19:10We have to view this as value, that we're creating value for our shareholders long term. So if the stock goes up from the announcement or from the buybacks, how long would you do this? Will you keep doing it until it remains the case that you feel it's undervalued? You can do as much as you want? Correct. As long as our intrinsic value exceeds the market value, again, conservatively determined, we'll continue to repurchase. But the one thing we have never done is we don't disclose the amount, the timing, or the computation. But we did feel this time it was important because of the change in leadership that we should highlight.

19:45Not even a ballpark. We're not going to hear something like this from you again. We won't know when you're in the market buying back. This is a one-time event to let our shareholders know. And you will say it's a$20 billion buyback and we're halfway through. We won't know anything. Correct. Is that a reasonable number? It could be a lot more at Berkshire. It's completely dependent upon the intrinsic value and how that equation remains in place. So Berkshire shares up until a minute ago were down maybe 1 % over the last year. Market's been up. You guys have$373 billion in cash as of the last filing.

20:21I guess you're looking around and it tells you that this is something that makes way more sense to you than buying other things, other stocks, but making other purchases. Exactly. We always look at effectively three buckets when we're allocating our capital. We have our existing businesses deploying capital back into those, both for their current operations and incremental opportunities. That really exists every day, and we're constantly challenging ourselves. Are we thinking about that properly? As you highlighted, Becky, there's also do we acquire stock? And when we're looking at companies, do we acquire whole companies also?

20:58And then there's the do we acquire equities, other equities? And as we've highlighted, we always look at that as very similarly to buying 100 % or 2%. And then the third bucket where we deploy our capital is share repurchases. Each of those with the amount of capital we have can be done independently. So when we're purchasing our shares, it's not taking away from any of the other decisions. Okay, we're going to come back to this line of questioning and some of these issues here. But before we do, I want to talk about another form that you put out today, too. That's a Form 4. It may not jump out as people as being as significant as I think it is.

21:38But in it, you say that you are buying 21 Class A shares. This is the disclosure of that. $15.3 million. What's the significance behind that purchase? Yes. And the significance is, if you look at my 2026 compensation that I'll receive this year, what we've done is, and what I've done, is taken the after-tax dollars of approximately$15.3 million and reinvested it or purchased Berkshire shares with the after-tax dollars. All of the extra. All the after tax. Basically taking all of your take home pay and putting it into shares of Berkshire. Yes. And the why is really important. One, as we've always highlighted, absolute alignment with our shareholders, our partners, our owners is critical.

22:31I already have some shares, but the goal was to continue to demonstrate alignment with them. Two, as the CEO, I absolutely, obviously believe in Berkshire. With the transition from Warren and I inherited a company that has an incredible foundation, I believe in its future, the opportunities that exist there. So I was very excited to use my after-tax proceeds and my compensation, as you highlighted, all of it, and effectively do it as we came out of the blackout period. Now, there is another part to this that's really important, because I really view this more as a plan or an approach. I'm committed to doing this every year, going forward.

23:21Your entire salary? My entire salary, as long as I'm the CEO, and I touched on it in the letter. I hope it's 20 years. But I will do that. So we'll file our 10K. I'll write the letter. And after the 48-hour cooling-off period, I'll purchase$15.3 million next year, whatever it is, after tax dollars. I love the Midwest, but I was kidding you when you walked in. I said, as your first move, you're going to Miami. You're going to move the headquarters of Miami. But now I understand. Leave it in Omaha. Stay in Omaha. What are you going to spend your money on anyway? Might as well buy some Berkshire.

24:00You've got nothing to do. You're going to go out and watch some cows or something. That's free, isn't it? There's nothing better than Berkshire, and it's what I do every day. I wake up, you know, thinking about Berkshire. I go to sleep thinking about Berkshire. Greg, if you decide to splurge on your commentator, it's like you're looking around. It's like, ah, I'm going to buy Berkshire stuff. What I think is interesting about this, Greg, is that you are effectively taking home less pay than Warren Buffett was. He was taking home$100 ,000. That was the salary that he took. It had to be the lowest pay in all of corporate America.

24:30Did he come up with this plan? No, this was completely myself. And by that, I just mean I wanted that alignment. Again, believe in Berkshire. And the thought being that it did evolve. Like I said, OK, I'm going to do this year. And then shortly thereafter, I thought, well, no, I'm going to do this every year. And it's best just to tell the world. And over that period of time, it'll be hundreds of millions of dollars of of my after tax dollars, just like our shareholders. I can't imagine anybody, any other corporate leader doing that. I can't imagine myself. I'm not worried about how you're going to do on this either.

25:10Well, I believe in Berkshire, but it is interesting, Becky and Joe, you're touching it. To me, of course, it's a logical thing to do when you're leading the company. And there's other leaders and CEOs that do the one-offs every once in a while. But to take all your after-tax dollars and to do it on a recurring basis. I did something similar with VersinStock. I'm with you. I'm an owner. I'm an owner. And I... You did not take your entire... I got a couple hundred chairs. No, I... Greg, what did Warren say about this? What did the board say about it? Both were obviously very supportive. Warren very much had your reaction that no one else in corporate America does this.

25:52And said, and the other thing is that this is so Berkshire. Because one thing we do not do at Berkshire across any of our businesses or with our executives, we don't have equity stock programs. We don't have option programs. You've never been given a share of Berkshire ever. Correct. So the whole idea is our shareholders, our owners use their after tax dollars to buy Berkshire. I'll do the same. So so Warren acknowledged immediately the alignment with our values. And I highlighted this to our Berkshire board in our February board meeting, and they were just absolutely supportive of it, obviously.

26:32Greg, Andrew's got a question as well. Yes, Andrew. Hey, Greg, it's great to see you. I applaud it, too. But I just just to contextualize it, because we talked about selling shares. Am I wrong back in 2022 that you sold Berkshire Hathaway Energy and collected effectively eight hundred seventy million dollars, by the way, which I also applaud, but I just contextually what's going on here in terms of your total total compensation and what's going into this? Correct. So, Andrew, back in the summer of 2022, there was the decision to sell my Berkshire Hathaway energy stock that had really accumulated going back to 1992, I think, is the duration of those holdings.