#’I think old-fashioned intelligence works pretty well’ [Video]

Legendary investors Warren Buffett and Charlie Munger aren’t fully sold on artificial intelligence.

While AI has become a major buzzword in first quarter earnings calls and the catalyst for a tech rally to start 2023, Buffett, 92, and Munger, 99, argue it might be not as revolutionary as some are making it out to be.

“I am personally skeptical of some of the hype that has gone into artificial intelligence,” Munger said at the Berkshire Hathaway (BRK-A, BRK-B) annual meeting. “I think old-fashioned intelligence works pretty well.”

AI has taken center stage on Wall Street since OpenAI launched the latest version of ChatGPT in late November. Since then, tech companies have grown increasingly interested in AI as ChatGPT became the fastest-growing app on record, and stocks such as Microsoft (MSFT), Nvidia (NVDA), and C3.ai. (AI) have skyrocketed.

AI has been the focus of earnings calls as tech companies wage an AI war on one another. Alphabet said its AI efforts lost $3.3 billion during the first quarter while Microsoft believes it can help it win market share amid “a generational shift in search.”

Microsoft has risen as a leader in the space, investing $10 billion in OpenAI. And the company’s founder, Bill Gates, recently presented some of the company’s AI technology to Buffett.

“It did these remarkable things but it couldn’t tell jokes,” Buffett said. “Bill told me that ahead of time and prepared me. But it just isn’t there.”

Although there’s been considerable excitement over AI, the prospects for the technology haven’t been viewed entirely positively. A group of famed tech founders penned a letter warning of the dangers of AI, and just last week, IBM CEO Arvind Krishna said AI could replace nearly 8,000 jobs at the company.

Buffett likened the disruptive nature of AI to the atomic bomb, which the United States used to ultimately bring an end to World War II. Buffett described the war tactic as necessary but questioned: “Is it good for the next 200 years of the world?”

“When something can do all kinds of things I get a little bit worried because now we won’t be able to un-invent it,” Buffett said.

Just as Munger and Buffett have been unimpressed with other trendy stock plays like cryptocurrency, which Munger called a “venereal disease,” Berkshire Hathway likely won’t be going all in on AI just yet.

“With AI, it can change everything in the world, except how men think and behave,” Buffet said. “And that’s a big step to take.”

Josh is a reporter for Yahoo Finance.

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Originally published May 6, 2023 at 6:10 PM