When you think of Warren Buffett, AI stocks likely aren't the first thing to pop into your mind.
The Oracle of Omaha, after all, is famous for his penchant for investing in "simple businesses".
"You don't have to be smart, as long as you stick to what you know," Warren Buffett famously advised.
And when it comes to the technology behind artificial intelligence, that's almost certainly beyond sticking to what the 92-year-old billionaire knows.
"If there's lots of technology, we won't understand it," he previously said.
But then the Berkshire Hathaway CEO has also said, "The best investments provide real-world value, not just market value."
And it's this real-world value that's likely been driving Warren Buffett's US$166 billion (AU$252 billion) investments in AI stocks.
Why Warren Buffett is investing billions in AI stocks
Looking at his (and Berkshire's wholly owned subsidiaries) three biggest tech stock holdings, Warren Buffett is well-placed to gain from the rapid advances being made in AI.
This is certainly something ASX investors should consider emulating. And we'll look at a few top ASX tech shares involved with AI below.
But first, here's how the Oracle of Omaha has amassed US$166 billion worth of AI stock.
His biggest holding by far is in Apple shares. With more than 915 million shares, Buffett's stake works out to a whopping US$164 billion. While Apple is more than just an AI stock, rumours abound that the tech giant is actively seeking to hire generative AI experts.
According to Apple CEO Tim Cook, "The potential is certainly very interesting."
Commenting on Apple recently, Warren Buffet said, "It just happens to be a better business than any we own."
Berkshire Hathaway also owns 10 million shares in Amazon, worth some US$1.2 billion. Buffett is a fan of Jeff Bezos. He said he's admired the Amazon founder "for a long, long time,".
And the third big AI stock held by Berkshire Hathaway is data warehouse and analytics specialist Snowflake. With more than six million shares, Berkshire's stake is worth more than US$1 billion.
What are some of the top AI stocks on the ASX?
If you want to emulate the AI investment made by Warren Buffett but wish to stick with ASX stocks, there are a number of companies to consider.
Brainchip Holdings Ltd (ASX: BRN), for example, is working on neuromorphic processors which mimic the human brain. The Brainchip share price is up 12.6% in intraday trading today. Shares remain down 52% over the past 12 months.
Another AI stock investors can consider to follow Warren Buffett's lead is Appen Ltd (ASX: APX). Appen is involved in machine learning and working on several AI products.
"The evolution of large language models such as ChatGPT has created significant excitement around the future of AI," chairman Richard Freudenstein said at Appen's AGM in May.
The Appen share price has come roaring back in 2023, up 57% year to date. The stock still has some way to go to recover its full-year losses, though, remaining down 38% over the past 12 months.
And a third ASX tech stock that could offer investors the growth Warren Buffett is aiming for is data centre operator NextDC Ltd (ASX: NXT).
AI is, after all, artificial. Meaning it needs to be supported by data centres.
The NextDc share price has gained 18% over the last 12 months and is up 42% in 2023.
