How artificial intelligence will affect Berkshire’s businesses
Andrew Ross Sorkin:
Hi, Warren. This one’s a fun one. Thomas Kimay is here. He’s a 27- year-old shareholder from Kentfield, California.
And I should preface this question by saying that he was here 17 years ago at 10 years old, asked you a question from the audience asking you if the internet might hurt some of Berkshire’s investments.
At the time, you said you wanted to see how things would play out. He’s now updated the question.
“What do you think about the implications of artificial intelligence on Berkshire’s businesses, beyond autonomous driving and GEICO, which you’ve talked about already? In your conversations with Bill Gates, have you thought through which other businesses will be most impacted?”
“And do you think Berkshire’s current businesses will have a significantly… will have significantly more or less employees a decade from now as a function of artificial intelligence?”
Andrew Ross Sorkin:
I mixed a couple questions together.
Yeah. I certainly have no special insights on artificial intelligence, but I will bet a lot of things happen in that field in the next couple of decades, and probably a shorter timeframe.
They should lead, I would certainly think… but again, I don’t bring much to this party. But I would certainly think they would result in significantly less employment in certain areas. But that’s good for society.
And it may not be good for a given business, but let’s take it to the extreme. Let’s assume one person could push a button and, essentially, through various machines and robotics, all kinds of things, turn out all of the output we have in this country.
So, everybody’s… there’s just as much output as we have. It’s all being done by, you know, instead of 150-some million people being employed, one person.
You know, is the world better off or not? Well, certainly we’d work a lot less hours a week… of work per week and so on.
I mean, it would be a good thing, but it would require enormous transformation in how people relate to each other, what they expect of government, you know, all kinds of things. And, of course, as a practical matter, more than one person would keep working.
But pushing the idea that way is one of the… you’d certainly think that’s one of the consequences of making great progress in artificial intelligence.
And that’s enormously prosocial, eventually. It’s enormously disruptive in other ways. And it can have huge problems, in terms of a democracy and how it reacts to that.
It’s similar to the problem we have in trade where trade is beneficial to society, but the people that see the benefits day by day of a… of trade… don’t see a price at Walmart on socks or whatever they’re importing, that says, you know, “you’re buying… you’re paying X, but you would pay X-plus-so-many-cents if you bought this domestically.”
So they’re getting these small benefits and invisible benefits. And the guy that gets hurt by it, who’s the roadkill of free trade, feels it very specifically. And that translates into politics.
And so, you can… it gets very uncertain as to how the world would adjust, in my view, to great increases in productivity.
And without knowing a thing about it, I would think that artificial intelligence would have that hugely beneficial social effect, but a very unpredictable political effect if it came in fast, which I think it could.
Well, you’re painting a very funny world where everybody’s engaged in trade. And the trade is, I give you golf lessons and you dye my hair. And that would be a world kind of like the royal family of Kuwait or something.
And I don’t think it would be good for America to have everything produced by one person and the rest of us just engaged in leisure.
How about if we just got twice as productive?
How about if we got twice as productive in a short period of time, so that 75 million people could do what 150 million people are doing now?
I think you’d be amazed how quickly people would react to that.
In what way?
That’s what happened during the period when there… I’m sure everybody remembers with such affection… back in the Eisenhower years, five percent a year or something… people loved it.
Nobody complained that they were getting air conditioning and they didn’t have it before.
Nobody wanted to go back to stinking, sweating nights in the South and…
Well, if you cut everybody’s hours in half, it’s one thing. But if you fire half the people and the other people keep working, I just think it gets very unpredictable. I mean, I think we saw some of that in this election because I think that…
Well, we’ve adjusted to an enormous amount of it. It just came along a few percent per year.
Well, and the question, then, is…
Don’t think you have to worry… I don’t think you have to worry about coming out at 25 percent a year. You know, I think you have to worry about it… you’re going to get less than two percent a year. That’s what’s worrisome.
OK. We’ll move on. But it will be, you know, it’s an absolutely fascinating subject to see what happens with this. But it’s very, very hard to predict.
If… in some way, you know, we’ve got 36,000 people, say, employed at GEICO, you know.
And if you could do the same… perform all the same functions, virtually all the same functions even, and do it with five- or 10,000 people, and it came on quickly, and the same thing was happening in a great many other areas, you know, I don’t think we’ve ever experienced anything quite like that.
And maybe we won’t experience anything like it in the future. I don’t know that much about AI, but…
I don’t think you have to worry about that.
Well, that’s because I’m 86.
It’s not going to come that quickly.
Looking for an offline, PDF copy of all shareholder questions carefully arranged into specific topics such as How to properly evaluate a company for potential investment, Intelligent Investing and Secrets to achieving Success and Happiness? Click on the image below to learn more.