Berkshire Hathaway Part II

**David Rosenthal** (0:00)
Guess how many grams of sugar are in this normal-looking size bottle of cherry coke?

**Ben Gilbert** (0:07)
Is that 20 ounce?

**David Rosenthal** (0:08)
It is 20 ounce, yep. Nope.

**Ben Gilbert** (0:18)
In a 20 ounce bottle, there's 70 grams of sugar?

**David Rosenthal** (0:21)
Seventy grams of sugar in one 20 ounce bottle. Wow. I can't believe they still sell this stuff.

**Ben Gilbert** (0:40)
Welcome to Season 8, Episode 6 of Acquired, the podcast about great technology companies and the stories and playbooks behind them. I'm Ben Gilbert, and I am the co-founder and managing director of Seattle-based Pioneer Square Labs and our venture fund, PSL Ventures.

**David Rosenthal** (0:56)
And I'm David Rosenthal, and I am an angel investor based in San Francisco.

**Ben Gilbert** (1:02)
And we are your hosts. On our last episode, we told the story of Warren Buffett in the years of running his own partnerships, those 12 years leading up through 1969, when he shut it down after his best year ever and returned all the money to his investors. Today, we will pick up right where we left off, telling the story of the declining suit liner manufacturer that he bought, Berkshire Hathaway. Today's story is one of an investment style in transition, from a focus on cigar butts to a focus on wonderful businesses, much of which was inspired by the man we've only briefly mentioned so far, Charlie Munger. Now you may be thinking to yourself, boy, it'll be really great to get the other half of the Berkshire story to understand where they are today. Unfortunately, you should know David and I better than that. We were foolish to think that we could tell the whole Berkshire story in a mirror to episodes. So this episode is Our Empire Strikes Back. It will serve as a bridge between the early forces that made Warren and the mature Berkshire that we have today. What made Buffett start investing again after dissolving his partnership? And why on earth did he decide to do that inside of the shell of the declining Berkshire instead of just starting a new fund? And even how did he end up briefly as the chairman of a Wall Street bank with a culture that he had criticized for his whole investing career? So here we are, part two of our Berkshire Hathaway trilogy.

**David Rosenthal** (2:39)
This really is the Empire Strikes Back. It's going to get dark at the end.

**Ben Gilbert** (2:42)
Truly.

**David Rosenthal** (2:43)
Be prepared.

**Ben Gilbert** (2:44)
There's a little bit of an apt analogy there. It's true. Well, folks, are you an Acquired Slack member yet? If not, what on earth have you been waiting for? It is a wonderful community, discussing, of course, all things acquired in recent episodes, but more importantly, it is a smart group of people having thoughtful, nuanced and respectful discussion about tech investing. You can join at acquired.fm slash Slack. This is a great time to tell you about one of our very favorite companies, crusoe.

**David Rosenthal** (3:14)
crusoe, as listeners know by now, is a clean compute cloud provider specifically built for AI workloads. NVIDIA is one of their major partners and literally crusoe's data centers are nothing but racks and racks of A100s and H100s. And because crusoe's cloud is purpose built for AI and run on wasted, stranded or clean energy, they can provide significantly better performance per dollar than traditional cloud providers.

**Ben Gilbert** (3:39)
Yes, we talked about that on our ACQ2 episode with crusoe CEO, Chase Lockmiller.

**David Rosenthal** (3:45)
The other element that makes crusoe special is the environmental angle. crusoe, of course, locates their data centers at stranded energy sites. So, think oil flares, wind farms that can't use all the energy they generate, etc. And uses that power that would otherwise be wasted to run your AI workloads instead.

**Ben Gilbert** (4:03)
obviously, it's a huge benefit for the environment and for customers on costs, since crusoe doesn't rely on the energy grid. Energy is the second largest cost of running AI after, of course, the price you pay NVIDIA for the chips. And these lower energy costs get passed on to customers.

**David Rosenthal** (4:19)
It's super cool that they can put their data centers out there in these remote locations where quote unquote energy happens, as opposed to the other hyperscalers such as AWS and Google and Azure, who need to build their data centers close to major traffic hubs where the Internet happens because they are doing everything in their clouds.

**Ben Gilbert** (4:35)
Yep. If you, your company, or your portfolio companies would like to use the lower cost and more performant infrastructure for your AI workloads, go to crusocloud.com/acquired, that's crusoecloud.com/acquired, or click the link in the show notes. Now lastly, if you aren't an LP, you should become one. Aside from all the things that we tell you, every time we have a brand new LP event coming up that we are super excited about. Our next book club will be with Brad Stone, who famously wrote The Everything Store, The Upstarts, and now David, what is his new book?