As artificial intelligence reshapes the appetite for electricity across the nation, Berkshire Hathaway's Greg Abel has drawn a quiet but consequential line: the company's utilities will power the hyperscalers, but only if the people who already depend on those grids are made better off, not burdened. In Iowa, where data centers now account for roughly one in twelve units of electricity consumed, that principle has translated into surging earnings, rising property tax revenues for schools, and a model that regulators have found difficult to oppose. Abel's conditions — no rate harm, community co
Berkshire's AI Power Play: Hyperscalers Welcome, But Not at Other Customers' Expense
There has to be a net benefit to our customers.
Mark
So Abel is saying Berkshire will take the hyperscaler business, but only if existing customers don't pay more. That sounds like a principle, but how does it actually work in practice?
Mimi
It works because of how regulated utilities operate. Rates are set to recover costs plus a return on capital. So when Berkshire builds infrastructure for a data center, the utility gets to earn a return on that investment. The hyperscaler pays for the power it uses, and existing customers don't see their rates rise because the new load is spread across the system and the utility's costs are recovered through the rate structure.
Luke
But that assumes the rate-setting process works that way in every state, and that regulators will actually enforce the "no cost shift" principle. Has Abel said how Berkshire ensures that happens? Or is he relying on regulators to do it?
Mimi
He's relying on regulators, but he's also giving them political cover. If he can show that a project brings property tax revenue to schools and doesn't raise rates for existing customers, regulators have an easier time approving it. Iowa is the proof of concept—8 percent of load from data centers, 38 percent earnings growth in Q2.
Mark
Wait, is that 38 percent growth all from data centers, or is that the whole utility segment?
Luke
That's the whole segment. The source says after-tax earnings at U.S. utilities rose 38 percent in Q2, and retail volumes were up 3 percent overall, with MidAmerican at 6 percent. So data centers are part of it, but not the whole story. There are also production tax credits mentioned that helped that quarter.
Mimi
Right, so the growth is real, but it's not purely from data centers. It's from data centers plus other factors. Still, the trajectory is clear—MidAmerican is leading because of the data center load.
Mark
And Abel said no projects have been rejected yet. Does that mean the community pushback he mentioned isn't actually stopping anything?
Luke
Not yet. But he also said there's "a lot more pushback" now than before. So the question is whether that changes. One community saying no, or one state imposing a moratorium, could stall things. The fact that nothing has been rejected so far doesn't mean it won't happen.
Mimi
The conditions are the insurance policy. Because Berkshire isn't asking existing customers to subsidize hyperscalers, and because projects bring real tax revenue to communities, the political case for approval is stronger. That's why Iowa works.
Mark
So the growth case depends on communities continuing to say yes, and on regulators continuing to structure rates so existing customers don't pay more. If either of those breaks, the model breaks.
Luke
Exactly. And we don't know how long that holds as data centers become a bigger share of the load. At 8 percent, it's manageable. At 20 or 30 percent, the dynamics might change.
Le Pouls
- The AI industry's voracious hunger for electricity has placed utility companies at a crossroads between enormous profit and the risk of shifting costs onto ordinary ratepayers.
- Greg Abel arrived at that crossroads with a firm condition: Berkshire's utilities will serve the hyperscalers, but not if existing customers absorb higher bills to subsidize the arrangement.
- Community resistance to data centers is intensifying nationwide, adding a second front of friction beyond energy supply constraints that Abel had long anticipated.
- Iowa's MidAmerican Energy has become the proof of concept — 38% earnings growth, 6% retail volume gains, and property tax windfalls for local schools, all without a single project rejected.
- Berkshire is backing its stance with $6.7 billion in energy capital expenditures in the first half of 2026 alone, building a rate base that regulators have little incentive to obstruct.
- With data centers at 8% of Iowa's load and more in development, Abel's conditional framework appears to be the foundation for a decades-long expansion rather than a ceiling on it.
As artificial intelligence reshapes the appetite for electricity across the nation, Berkshire Hathaway's Greg Abel has drawn a quiet but consequential line: the company's utilities will power the hyperscalers, but only if the people who already depend on those grids are made better off, not burdened. In Iowa, where data centers now account for roughly one in twelve units of electricity consumed, that principle has translated into surging earnings, rising property tax revenues for schools, and a model that regulators have found difficult to oppose. Abel's conditions — no rate harm, community consent, managed water impact — are less a constraint on growth than a philosophy about who infrastructure is ultimately meant to serve.
When Greg Abel spoke from Tokyo in early September about artificial intelligence and electricity, he carried the authority of someone who had spent years running the infrastructure now at the center of a national reckoning. As Berkshire Hathaway's new CEO — and the longtime steward of its energy operations before succeeding Warren Buffett in January — Abel had already worked out his terms. Berkshire would power the hyperscalers building AI data centers, but only under conditions that protected everyone else on the grid.
The conditions were threefold: no rate increases for existing customers, a net benefit to the communities involved, and responsible management of water consumption. Abel had delivered this message directly to the cloud companies, to governors, and to state regulators. The business was welcome; the cost-shifting was not.
Iowa became the clearest demonstration of what those terms could produce. MidAmerican Energy, Berkshire's utility there, watched data centers grow to roughly 8 percent of its total electricity load by the end of last year. The financial results followed. After-tax earnings at Berkshire's U.S. utilities rose 38 percent in the second quarter of 2026, reaching $597 million. MidAmerican led retail volume growth at 6 percent, and the broader energy segment posted 27 percent year-over-year earnings growth in the quarter. Property taxes from the data centers flowed to local schools — a concrete community benefit that made opposition harder to sustain.
That growth demanded capital, and Berkshire was supplying it. Of $10.6 billion in capital expenditures during the first half of 2026, $6.7 billion went to energy and the BNSF railroad, with another $8.6 billion projected for the rest of the year. For a regulated utility, that spending compounds: rates are set to recover costs plus a return on invested capital, so every approved data center project enlarges the base on which Berkshire earns its returns.
Abel acknowledged that community resistance was becoming a second constraint on the AI build-out, alongside the energy supply limits he had long anticipated. Yet no Berkshire project had been turned away. His rate-protection stance gave regulators and communities a harder case to argue against — a utility that could demonstrate its largest new customers were subsidizing neighbors rather than burdening them occupied a different position than one that could not. On those terms, 8 percent of Iowa's load looked less like a ceiling than a starting point.
Greg Abel sat down with CNBC from Tokyo on a Wednesday morning in early September, and when the conversation turned to artificial intelligence and the power demands it creates, the Berkshire Hathaway CEO spoke with the precision of someone who had spent years managing exactly this kind of infrastructure. Before taking over from Warren Buffett in January, Abel ran Berkshire's energy operation—the utility business that generates power, manages grids, and now finds itself at the center of a national build-out of data centers that consume electricity at scales most people have never contemplated.
He came with a condition. Berkshire would serve the hyperscalers—the massive cloud companies building those data centers—but only under terms that protected everyone else. The company's utilities would not become a vehicle for shifting costs onto existing customers. There had to be no rate impact on the people already paying their power bills. Better yet, there had to be a net benefit. Abel had shared these principles with the hyperscalers themselves, with governors, and with state regulators. The message was consistent: Berkshire wanted the business, but not at anyone else's expense.
The conditions extended beyond rates. Communities had to understand what a data center would do to their water supply—a concern that had become more manageable as the industry learned to limit consumption. And the communities had to want the facility there. In Abel's view, a data center could not simply be imposed. It had to be welcomed.
Iowa offered the clearest picture of what success looked like under these terms. Berkshire's MidAmerican Energy utility operates there, and data centers had grown to represent about 8 percent of the utility's total load by the end of last year, with more projects in development. The financial results told the story. After-tax earnings at Berkshire's U.S. utilities jumped 38 percent in the second quarter of 2026 compared to the same period a year earlier, reaching $597 million. For the first half of the year, earnings were up 11 percent year over year. Retail electricity volumes across the utilities climbed about 3 percent through June, but MidAmerican led the way at 6 percent. The electric utility margin—the difference between revenue and energy costs—expanded 8 percent year over year in the quarter, driven by those higher volumes. The whole energy segment accelerated as the year progressed. After nearly flat earnings in the first quarter, Berkshire Hathaway Energy posted 27 percent year-over-year earnings growth in the second quarter, reaching $891 million.
That growth required capital, and Berkshire was deploying it aggressively. Of the company's $10.6 billion in capital expenditures during the first half of 2026, $6.7 billion went to the energy business and the BNSF railroad. The two units projected spending another $8.6 billion for the remainder of the year. For a regulated utility, capital spending is the engine of growth. Rates are typically set to recover costs plus a return on invested capital, which means every data-center project that cleared Abel's conditions added to the base on which the company earned its returns.
But Abel acknowledged a headwind. Community resistance to data centers was intensifying across the country. He had long believed energy supply would be the constraint on the AI build-out, and now he was watching community opposition emerge as a second barrier. Yet so far, the pushback had not stopped Berkshire. No project had been rejected. Construction continued.
Abel's rate protection likely explained part of that resilience. A utility that could tell regulators the hyperscalers would not be subsidized by other customers' power bills presented a harder target for opposition. In Iowa, the property taxes these projects generated flowed directly to schools and local services—a tangible community benefit beyond the jobs. The conditions were not a constraint on growth so much as the foundation for it. Berkshire was qualifying load it could serve for decades in states that wanted the infrastructure there, and it was backing those projects with billions of dollars that regulators had little reason to resist. Data centers represented 8 percent of Iowa's load now. On Abel's terms, that share could keep climbing.
Citations marquantes
We are interested in serving these hyperscalers if there was no impact to the rates of our other customers. And in fact, we've pretty much taken the approach. There has to be a net benefit to our customers.— Greg Abel, Berkshire Hathaway CEO, on CNBC
There is a lot more pushback in the communities across the U.S.— Greg Abel, on community resistance to data center projects
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