Berkshire (BRK.B)’s CEO Says Communities Are Fighting Back on Data Centers

Berkshire Hathaway Inc. (NYSE:BRK.B) CEO Greg Abel warned of increasing pushback against new data center construction across the U.S. in a CNBC interview on September 2. Abel emphasized that Berkshire will primarily supply power to data centers through Berkshire Hathaway Energy, rather than building facilities itself. The company will only serve large computing customers if existing customers' rates remain stable.

New York recently imposed a one-year moratorium on large new data center construction, and at least 11 states are considering similar measures. Electricity bills near data center hubs have increased by up to 267% over five years, with data centers accounting for 4% to 5% of all U.S. electricity consumption. Mizuho analyst Vikram Malhotra suggested data centers could become a defining political issue heading into the midterms.

Abel highlighted grid capacity and permitting timelines as the real constraints on AI buildout, rather than chips or capital. He believes data centers currently make up about 8% of Berkshire Energy's load in Iowa. Berkshire's commitment to avoiding rate increases for existing customers could help shield the utility business from political pressure. The company's exposure to AI through its equity portfolio, including Alphabet, may provide additional benefits from continued AI infrastructure investment.

However, growing opposition to data center construction could complicate Berkshire's expansion plans. Electricity bills near major data center hubs have risen significantly, and more states are implementing construction moratoriums. Abel's approach to protecting existing customers might limit Berkshire Energy's growth, as it prevents pursuing projects that require higher rates to support new infrastructure.

Permitting challenges and community opposition could further delay grid connections and site preparation, leading to extended timelines. Additionally, Greg Abel's leadership transition, taking over capital allocation decisions, could introduce uncertainty around Berkshire's strategy as he establishes his approach.