Risks to Berkshire

[Hektor]

Technology is changing the world at a rapid rate. Demographics change and its adoption of technology is changing laws/regulations, probably rapidly. Does all these pose a risk to Berkshire companies that enjoys benefits derived from natural and/or regulatory moats?

 

Here is a recent example:

 

https://www.wsj.com/business/autos/rivian-made-car-dealers-back-down-in-washington-more-states-may-be-next-70499eec

 

Rivian Made Car Dealers Back Down in Washington. More States May Be Next.

Dealers have long held a tight grip on car sales, but cracks are starting to show

 

Electric-vehicle startup Rivian Automotive just won a yearslong battle with car dealers in Washington state that threatens the model of how cars are sold.

After fighting to sell its vehicles directly to buyers, Rivian threatened to take its case to voters with a ballot measure to permit direct sales.

The dealers blinked.

 

Will this erode some/all of Berkshire Automotive’s advantages?

[Parsad]

On 3/28/2026 at 3:23 PM, Hektor said:

Technology is changing the world at a rapid rate. Demographics change and its adoption of technology is changing laws/regulations, probably rapidly. Does all these pose a risk to Berkshire companies that enjoys benefits derived from natural and/or regulatory moats?

 

Here is a recent example:

 

https://www.wsj.com/business/autos/rivian-made-car-dealers-back-down-in-washington-more-states-may-be-next-70499eec

 

Rivian Made Car Dealers Back Down in Washington. More States May Be Next.

Dealers have long held a tight grip on car sales, but cracks are starting to show

 

Electric-vehicle startup Rivian Automotive just won a yearslong battle with car dealers in Washington state that threatens the model of how cars are sold.

After fighting to sell its vehicles directly to buyers, Rivian threatened to take its case to voters with a ballot measure to permit direct sales.

The dealers blinked.

 

Will this erode some/all of Berkshire Automotive’s advantages?

 

I don't see AI changing capital intensive businesses much other than creating efficiencies, and a lot of Berkshire's businesses are now high capex businesses. 

 

Lower capex, analysis based businesses are probably going to be much more vulnerable.  Berkshire doesn't really have a lot of these.  But insurance by far is Berkshire's biggest business and does fall into this category.  I think the type of coverages will be more dramatic than the demise of insurance itself.  For example, if you have self-driving cars everywhere with fewer accidents or fewer employed people, auto insurance and worker's compensation insurance will not be as great a business.  But things like reinsurance, property-casualty, cyber insurance, robotics liability insurance, etc might pick up the slack.

 

Berkshire's service businesses will probably actually become more efficient from AI and robotics, and probably more profitable, while employing fewer people per dollar in revenue.  

 

I think the best people to manage any such technology risk is probably the same people already running those Berkshire businesses...they are well-aware of changes to their specific industries.  Cheers!  

[rogermunibond]

GEICO is pretty representative of a huge deterioration in the moat due to lack of investment in technology and systems to better underwrite and process P/C risk.

 

The algorithm built by Tony Nicely probably started to deteriorate even with Nicely was CEO but it didn't become truly apparent until 2019 and then 2020 brought out huge problems with GEICO underwriting.

[Eldad]

Not much risk and much less than anything else you could buy IMO. 
 

1T market cap.

 

Roughly speaking you have:

200B in a railroad and utility

165B Net cash position (not including float and tax liabilities)

335B in a well diversified basket of securities

 

Thats 70% of the value just in that. Basically everything else, other than the insurance, is insignificant by itself. And then you are hopefully buying new and more future adapted things all the time. 

[mengan]

Risk is opportunity cost.