Buffett Issues Skeptical Note on AI

Berkshire Hathaway CEO Warren Buffett and his top insurance executive, Ajit Jain, issued a somewhat skeptical note about artificial intelligence and its impact on the insurance business.

“There is no question in my mind that AI is going to be a real game changer, and it’s going to change the way we assess risk, we price risk, we sell the risk, and then the way we end up paying claims,” said Jain. “Having said that, I certainly also feel that people end up spending an enormous amount of money trying to chase the next new, fashionable thing. We are not very good in terms of being the fastest, the first mover. Our approach is more to wait and see until the opportunity crystallizes, and we have a better point of view in terms of risk of failure, upside, downside.

“So right now, the individual insurance operations do dabble in AI and try and figure out what is the best way to exploit it, but we have not yet made a conscious big time effort in terms of pouring a lot of money into this opportunity,” Jain continued. “My guess is we will be in a state of readiness. And should that opportunity pop up, we’ll be in a state where we’ll jump in promptly.”