Berkshire Hathaway Part III

**David Rosenthal** (0:00)
I'm going with just water as my beverage this time, and no peanut brittle.

**Ben Gilbert** (0:06)
Oh, did you have a little heart attack last time after a lot of sugar?

**David Rosenthal** (0:08)
Yeah. I think you could hear it in my voice. I think I was a little manic.

**Ben Gilbert** (0:14)
I'm going with a vitamin water zero because we are going to need the electrolytes for this marathon.

**David Rosenthal** (0:20)
Is vitamin water owned by?

**Ben Gilbert** (0:22)
Coca-Cola, baby.

**David Rosenthal** (0:23)
Coke, that's right.

**Ben Gilbert** (0:25)
I was on my run this morning and I was listening to the Adam Mead book that I referenced and I ran by Berkshire Hathaway Properties like house for sale. I was just like, it's pretty hard to go through your day without using a Berkshire product or service.

**David Rosenthal** (0:42)
I'm so excited. I literally woke up in the middle of the night last night and couldn't go back to sleep. I was so excited.

**Ben Gilbert** (0:47)
Really?

**David Rosenthal** (0:48)
Yeah.

**Ben Gilbert** (0:49)
I love it. Welcome to Season 8, Episode 7 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** (1:16)
And I'm David Rosenthal, and I am an angel investor based in San Francisco.

**Ben Gilbert** (1:22)
And we are your hosts. Well, David, here we are, the final episode in our Berkshire trilogy.

**David Rosenthal** (1:29)
I feel like we were texting about this. I feel like we're like Bungie developing the Halo franchise. You know, Halo 2 was supposed to be the end. We're going to finish the fight, you know? Last time was supposed to be the end. We're back for number three. And Halo 3 was so good, man.

**Ben Gilbert** (1:44)
It was so good.

**David Rosenthal** (1:45)
That was the best.

**Ben Gilbert** (1:46)
See, now we have a lot to live up to. Well, listeners, we told you about Warren's literally perfect record with the Buffett partnerships in the 60s, where he generated a positive return and beat the stock market every single year for 12 years. We then wandered the path with Warren of consolidating his investments into Berkshire Hathaway, joining forces with Charlie, swerving through regulators and coming out unscathed.

**David Rosenthal** (2:13)
Question mark?

**Ben Gilbert** (2:14)
Yeah. When we last left off, Warren and Charlie were in 1992 finishing up an absolutely monster run of returning over 27% per year for 22 years.

**David Rosenthal** (2:28)
Spoiler alert, not going to be the case this time.

**Ben Gilbert** (2:31)
No, those were no doubt Berkshire's glory days. So today we will tell quite a different story, a story of what happens when a time-tested investment philosophy gets confronted with systemic changes in the world, like the PC and the Internet. And concurrently, while the world was changing, so was Berkshire by virtue of their own success.
So, when you now need to write billion-dollar checks to move the needle, there's only so many places you can go knocking. And all those places are quite visible to other investors too. So today, on part three, we will tell the story of the large and mature Berkshire Hathaway and examine what the future may hold with the next generation. Well, listeners, are you an Acquired Slack member? If not, come join us. The most recent thing that I want to highlight is the Digital Assets channel. It is one of the best entry points I've seen on the web for people to discuss everything going on in the crypto landscape. Yes, I just said crypto on the Berkshire episode in a very thoughtful and nuanced way. Just great discussion going on there. It's also great for beginners. So as always, come join us. Acquired.fm slash Slack. This is a great time to tell you about one of our very favorite companies, Crusoe.

**David Rosenthal** (3:48)
So 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. 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** (4:14)
Yes, we talked about that on our ACQ2 episode with Crusoe CEO Chase Lockmiller.

**David Rosenthal** (4:19)
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.