Quote of the day by investor Warren Buffett on AI capex: "That's real money... That kind of money wasn't even put in the railroad business" — outlining his bullish long-term thesis on AI

In a recent interview with CNBC, the renowned investor Warren Buffett expressed his thoughts on the capital expenditure (capex) being poured into AI infrastructure. Speaking in July 2026, Buffett remarked: "That's real money... That kind of money wasn't even put in the railroad business." This statement underscores his belief in the significant financial commitment required for AI development.

Big tech companies such as Google, Meta, Microsoft, and Alphabet have pledged substantial sums of money towards AI capex, with projections reaching up to $750 billion in 2026 and $4.5 trillion by 2030 among the four largest hyperscalers. Some experts view this spending as evidence of an inflated bubble fueled by big tech companies' unwavering commitment to a technology yet to demonstrate meaningful returns.

However, Warren Buffett, speaking on behalf of his investment firm Berkshire Hathaway, defended Berkshire's substantial investment in Alphabet by drawing parallels to the construction of the railroad system in the 1800s. The investor, who retired recently, made a $10 billion investment in Alphabet in June 2026, despite his earlier skepticism about software giants.

Buffett now believes that Alphabet's shift towards physical infrastructure and compute power to support AI, alongside their strong cash flow, justifies their investment.