Two ways Berkshire hopes to cash in on AI

BECKY QUICK:  Welcome back, everybody.

Berkshire Hathaway first invested in Japan’s five main “trading houses” just over six years ago, and it consistently increased its position. Berkshire now owns more than 10 percent of each of the top five. 

And the company’s CEO, Greg Abel, is in Japan right now.

He joins us for a business update and what he’s seeing there. And, Greg, it’s great to see you. Thank you for joining us.

GREG ABEL:  Good morning, Becky. Great to be on “Squawk Box”.

BECKY QUICK:  Good morning. Although I — I see it’s evening there in Japan as we would anticipate.

Greg, let’s talk a little bit about what you’re doing there, why you’re in Japan right now.

GREG ABEL:  Yeah. It really serves a couple of great purposes.

First of all, upon arriving, I was able to go visit Tungaloy. It’s one of our operating units here based in Japan. It’s part of IMC, a company that makes tool bits. So spent the afternoon up in Fukushima with our team there.

And it’s really amazing story. We acquired it back in 2008. And over that period of time, really built a business from — from scratch.

It came out of Toshiba, but a relatively small company and three, so a number of significant plants up in Fukushima. So spent the day there touring it.

We have 15 hundred employees in Japan and really, just really unique.

Here’s a company that has just under $240 million of sales in Japan and an incremental $400 million internationally.

So, very small group just doing remarkable things. And it’s a — it’s a great way to start a trip.

And then, obviously, been visiting with our — each of the five trading houses and Tokio Marine.

BECKY QUICK:  That purchase we first found out about six years ago, I think the purchase of those five trading houses that you all originally bought into.

At the time when we found out, I think it was around 5 percent that you owned of each of the trading houses.

You had made a deal with them, you and Warren Buffett, that you wouldn’t buy more than 9.9 percent without their permission.

I think all of those houses have appreciated having Berkshire as a shareholder. You now own more than 10 percent in each of them.

A lot of that’s been because those companies have been buying back shares, too.

But what — what is your long-term plan for these trading house positions? And what kind of partnership do you have with these companies?

GREG ABEL:  Yeah, you’re absolutely right. It goes back to six years ago.

We actually announced it U.S. time. It was Warren’s 90th birthday. And the next day it was announced in Tokyo and in Japan that we had acquired just over 5 percent.

And at that time, we communicated, it was really a long-term proposition, that we saw this as a long-term holding. And we looked forward at that moment to building a relationship with each of the five companies.

Three years later, we attended — were here in Tokyo — in 2023, and we met with each of the companies. And that was part of building the relationship because, one, we were very…