Business
What Buffett’s Exit Means
A conscience of capitalism prepares to step off the stage
It was closing in on 1 p.m. when Warren Buffett, seated onstage before a rapt audience of about 40,000 at the CHI Health Center in Omaha, said that he was getting a “5-minute warning.”
To most of those there for the annual meeting of Berkshire Hathaway, his company, it was simply a signal that the gathering — known as Woodstock for capitalists — was drawing to a close. No one knew that something historic was about to happen.
After 60 years of running the company he has called his painting, the 94-year-old Buffett said that he planned to step down as chief executive at year end. (Proving how much freedom he has always exercised at Berkshire, he surprised his own board and Greg Abel, his handpicked successor: “I want to spring that on the directors,” he said with a smile.)
People in the crowd, many of whom were in tears, rose from their seats in a standing ovation for a singular figure in the business world.
Buffett is often described as a symbol of American capitalism. The truth is that he has always been an outlier. He is more the conscience of capitalism, willing to speak uncomfortable truths about the system’s ills while others remained silent. (His public comments on issues like tariffs over the weekend are a prime example.)
The billionaire always comes across as a gentleman, and in an age of distrust he became someone people could trust. Fellow business moguls and government officials admired him because of his success, yes — Berkshire reported $89 billion in net profit last year, and it is one of the biggest buyers of U.S. Treasury bonds — but also because he didn’t appear to have changed despite his wealth. He lives in a modest house in Omaha, and for years drove his own car, including to the drive-through at McDonald’s.
Buffett isn’t perfect, something he often acknowledges, and he has urged his followers to stay humble as he discussed his own investing mistakes and misses. But that also got to one of his biggest accomplishments, using his annual Berkshire letters and marathon Q. and A. sessions with shareholders to educate generations about business, investing and life itself.
After the announcement, I was struck by a social media post from someone I wouldn’t have normally considered to be a Berkshire watcher, who perfectly encapsulated the importance of Buffett and his longtime business partner, the late Charlie Munger. “They were the good investors, dealers in reality, patient,” wrote Nick Denton, the founder of Gawker. “When the history of the rise and fall of America is written, one of the chapters will begin in Omaha, with their departure.”
As Buffett prepares to depart, the big question is: What will happen to his masterpiece once it passes to Abel?
It has been apparent for several years now that on a day-to-day basis, Abel is already running large swaths of Berkshire’s operations, so the shift likely won’t be dramatic. But the scrutiny of “Abel’s Berkshire” will undoubtedly increase: The company wasn’t built just as a collection of disparate businesses, but as the vision of one man.
Abel has said he will seek to maintain the culture that his boss meticulously built. But things will inevitably become different. Berkshire’s board gave Buffett an unparalleled degree of autonomy to operate as he saw fit, often learning about significant deals he had struck only after the fact.
Abel will have to work hard to earn even some of that latitude, and under him Berkshire is likely to operate with more guardrails. But there is speculation that Buffett will remain chairman for some period, which could afford Abel more freedom as he grows into the top job.
Nevertheless, Buffett’s success, and the company he built, were exceptional. What investors gathered in Omaha this weekend, and the world over, want to know is what comes next.
HERE’S WHAT’S HAPPENING
Markets brace for central banks and a busy earnings week. On Wednesday, the Fed is widely expected to again hold interest rates steady, potentially further irritating President Trump (though he seems to be backing off calls to fire Jay Powell, the Fed chair). Big companies are also set to report results, with investors focusing on further fallout from the trade war: Ford announces on Monday; Disney, Uber and Novo Nordisk on Wednesday; and Toyota, AB InBev and Shopify on Thursday.
Stocks look set to snap a nine-day winning streak. S&P 500 futures are down, with energy stocks in particular looking weak. Oil prices have fallen roughly 2 percent on Monday — West Texas Intermediate, the U.S. benchmark, is trading around $56.60, well below most domestic drillers’ break-even price — after the OPEC Plus cartel shifted course on Saturday and said it would increase production.
Shell’s shares jump on a report that it’s weighing a bid for BP. The oil giant’s advisers are evaluating a takeover of the struggling BP, Bloomberg reports, and could pounce if oil prices (and its rival’s stock) fall further. The fate of BP has become a much-discussed issue, with Wall Street analysts seeing it as a prime acquisition target as it pursues a turnaround plan under pressure from the activist investor Elliott Investment Management.
Prediction markets versus the vaticanisti
Betting on papal elections may be older than the Sistine Chapel. This week’s conclave involves a new twist: It’s the first time that major online prediction markets have turned their focus on the Vatican’s ancient selection process.
And the wagers are flowing in. The Italian cardinal Pietro Parolin has emerged as the odds-on favorite to succeed Pope Francis, according to the prediction markets Polymarket and Kalshi. Even a report last week that the 70-year-old had medical issues, which the Vatican denied, did little to dent that lead.
But while prediction markets claimed vindication in correctly predicting President Trump’s victory in November, picking the next heir to Saint Peter’s throne is likely to be a tougher challenge, experts both inside the Vatican — known as the “vaticanisti” — and outside tell Bernhard Warner and Michael de la Merced.
The wisdom of crowds can likely go only so far. High-tech betting sites “will never be able to break through the complexity, the unpredictability of the decisions made inside,” Franca Giansoldati, a Vatican specialist who writes for Il Messaggero, one of Italy’s biggest daily newspapers, said.
Rajiv Sethi, an economist at Barnard College who has studied prediction markets, noted that when it came to the presidential election, bettors were able to process a wide variety of information sources, including public polls and televised debates. The papal conclave — famously conducted behind closed doors and composed of an expected 133 cardinal electors sworn to secrecy — offers far fewer clues for gamblers.
Consider that a spike in the Polymarket contract betting that a new pope would be picked in 2025 took place after Francis’ death was announced, according to Sethi. Were there inside trading, someone could have made a lot of money. “We can rule out information leakage from cardinals,” Sethi said.
Conclave politics have been highly unpredictable. In 2013, the odds-on favorite was Cardinal Angelo Scola; then-Cardinal Jose Maria Bergoglio, who became Francis, was on few short lists. There are also unexpected developments, most recently when Cardinal Angelo Becciu, who was forced to resign his positions after a financial scandal, briefly sought to crash the upcoming conclave.
Again this time, the cardinals are divided, and many are meeting for the first time — factors that could complicate how long it takes before white smoke emerges from the Sistine Chapel.
Then there are other potential wild cards, including President Trump’s policies (which Francis frequently criticized), Giansoldati noted. Could cardinals even be influenced by a Trump social media post depicting himself in papal vestments? Analysts have seen a kind of Trump effect energizing national elections around the world already this year.
All that is unlikely to deter online bettors. Kalshi’s main contract on who the next pope will be currently has about $5 million in wager volume. “So far, the papal election market is tracking to be as big as the Super Bowl,” which saw $27 million in volume, Jack Such, a spokesman for the prediction market, told DealBook.
“Today, it might be that, you know, Donald Trump thinks he can take over the election system through one of his executive orders. Tomorrow maybe it’s the banking system. After that, maybe it’s contracts. Maybe he decrees, ‘I’m gonna decide which contracts are binding and which contracts aren’t binding.’ So, the legal system is fundamental to how our society operates, how capitalism operates, and everyone should have a stake in that.”
— Marc Elias, a prominent lawyer for the Democratic Party whom President Trump has targeted by name in his campaign against big law firms, on “60 Minutes.” Trump drew further concern when, during an interview on “Meet the Press” that aired on Sunday, he repeatedly said “I don’t know” when asked if he needed to uphold the Constitution and guarantee the right of due process.
The trade war goes to Hollywood
Shares in Netflix were down more than 4 percent in premarket trading this morning as investors weigh President Trump’s latest tariff target: films made overseas.
Never mind that Hollywood has a huge trade surplus with the rest of the world, and that it’s difficult to define how much of a major film is actually produced outside the United States. The proposal, which involves a 100 percent levy on such films, could scramble the economics for major studios and streaming services.
Elsewhere in tariff news:
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Trump said on Air Force Once that he has no plans to speak with Xi Jinping, China’s top leader, this week as the trade talks between the two stall. But he reiterated that he is willing to lower the levies that have hit commerce between the two countries.
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Many of the corporate promises to invest big in America, which the White House has said amount to “trillions of dollars in new investment,” are wildly overblown, according to an analysis by The Washington Post.
DEALBOOK WANTS TO HEAR FROM YOU
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The sale of Warner Bros. — whether in pieces to Netflix or in its entirety to Paramount — is stirring mounting worries among Hollywood union leaders about the possible fallout for their members.
Unions representing writers, directors, actors and crew workers have voiced growing concerns that further consolidation in the media industry will reduce competition, potentially causing studios to pay less for content, and make it more difficult for people to find work.
“We’ve seen this movie before, and we know how it ends,” said Michele Mulroney, president of the Writers Guild of America West. “There are lots of promises made that one plus one is going to equal three. But it’s very hard to envision how two behemoths, for example, Warner Bros. and Netflix … can keep up the level of output they currently have.”
Last week, Netflix announced it agreed to buy Warner Bros. Discovery’s film and TV studio, Burbank lot, HBO and HBO Max for $27.75 a share, or $72 billion. It also agreed to take on more than $10 billion of Warner Bros.’ debt. But Paramount, whose previous offers were rebuffed by Warner Bros., has appealed directly to shareholders with an alternative bid to buy all of the company for about $78 billion.
Paramount said it will have more than $6 billion in cuts over three years, while also saying the combined companies will release at least 30 movies a year. Netflix said it expects its deal will have $2 billion to $3 billion in cost cuts.
Those cuts are expected to trigger thousands of layoffs across Hollywood, which has already been squeezed by the flight of production overseas and a contraction in the once booming TV business.
Mulroney said that employment for WGA writers in episodic television is down as much as 40% when comparing the 2023-2024 writing season to 2022-2023.
Executives from both companies have said their deals would benefit creative talent and consumers.
But Hollywood union leaders are skeptical.
“We can hear the generalizations all day long, but it doesn’t really mean anything unless it’s on paper, and we just don’t know if these companies are even prepared to make promises in writing,” said Lindsay Dougherty, Teamsters at-large vice president and principal officer for Local 399, which represents drivers, location managers and casting directors.
Dougherty said the Teamsters have been engaged with both Netflix and Paramount, seeking commitments to keep filming in Los Angeles.
“We have a lot of members that are struggling to find work, or haven’t really worked in the last year or so,” Dougherty said.
Mulroney said her union has concerns about both bids, either by Netflix or Paramount.
“We don’t think the merger is inevitable,” Mulroney said. “We think there’s an opportunity to push back here.”
If Netflix were to buy Warner Bros.’ TV and film businesses, Mulroney said that could further undermine the theatrical business.
“It’s hard to imagine them fully embracing theatrical exhibition,” Mulroney said. “The exhibition business has been struggling to get back on its feet ever since the pandemic, so a move like this could really be existential.”
But the Writers Guild also has issues with Paramount’s bid, Mulroney said, noting that it would put Paramount-owned CBS News and CNN under the same parent company.
“We have censorship concerns,” Mulroney said. “We saw issues around [Stephen] Colbert and [Jimmy] Kimmel. We’re concerned about what the news would look like under single ownership here.”
That question was made more salient this week after President Trump, who has for years harshly criticized CNN’s hosts and news coverage, said he believes CNN should be sold.
The worries come as some unions’ major studio contracts, including the DGA, WGA and performers guild SAG-AFTRA, are set to expire next year. Two years ago, writers and actors went on a prolonged strike to push for more AI protections and better wages and benefits.
The Directors Guild of America and performers union SAG-AFTRA have voiced similar objections to the pending media consolidation.
“A deal that is in the interest of SAG-AFTRA members and all other workers in the entertainment industry must result in more creation and more production, not less,” the union said.
SAG-AFTRA National Executive Director Duncan Crabtree-Ireland said the union has been in discussions with both Paramount and Netflix.
“It is as yet unclear what path forward is going to best protect the legacy that Warner Brothers presents, and that’s something that we’re very actively investigating right now,” he said.
It’s not clear, however, how much influence the unions will have in the outcome.
“They just don’t have a seat at the ultimate decision making table,” said David Smith, a professor of economics at the Pepperdine Graziadio Business School. “I expect their primary involvement could be through creating more awareness of potential challenges with a merger and potentially more regulatory scrutiny … I think that’s what they’re attempting to do.”
Businessman Brian Kahn has pleaded guilty to conspiracy to commit securities fraud in a case that brought down a hedge fund, helped lead to the bankruptcy of a retailer and damaged West Los Angeles investment bank B. Riley Financial.
Kahn, 52, admitted in a Trenton, N.J., federal court Wednesday to hiding trading losses that brought down Prophecy Asset Management in 2020. The Securities and Exchange Commission alleged the losses exceeded $400 million.
An investor lawsuit has accused Kahn of funneling some of the fund’s money to Franchise Group, a Delaware retail holding company assembled by the investor that owned Vitamin Shoppe, Pet Supplies Plus and other chains.
B. Riley provided $600 million through debt it raised to finance a $2.8-billion management buyout led by Kahn in 2023. It also took a 31% stake in the company and lent Kahn’s investment fund $201 million, largely secured with shares of Franchise Group.
Kahn had done deals with B. Riley co-founder Bryant Riley before partnering with the L.A. businessman on Franchise Group.
However, the buyout didn’t work out amid fallout from the hedge fund scandal and slowing sales at the retailers. Franchise Group filed for bankruptcy in November 2024. A slimmed-down version of the company emerged from Chapter 11 in June.
B. Riley has disclosed in regulatory filings that the firm and Riley have received SEC subpoenas regarding its dealings with Kahn, Franchise group and other matters.
Riley, 58, the firm’s chairman and co-chief executive, has denied knowledge of wrongdoing, and an outside law firm reached the same conclusion.
The failed deal led to huge losses at the financial services firm that pummeled B. Riley’s stock, which had approached $90 in 2021. Shares were trading Friday at $3.98.
The company has marked down its Franchise Group investment, and has spent the last year or so paring debt through refinancing, selling off parts of its business and other steps, including closing offices.
The company announced last month it is changing its name to BRC Group Holdings in January. It did not immediately respond to requests for comment.
At Wednesday’s plea hearing, Assistant U.S. Atty. Kelly Lyons said that Kahn conspired to “defraud dozens of investors who had invested approximately $360 million” through “lies, deception, misleading statements and material omissions.”
U.S. District Judge Michael Shipp released Kahn on a $100,000 bond and set an April 2 sentencing date. He faces up to five years in prison. Kahn, his lawyer and Lyons declined to comment after the hearing.
Kahn is the third Prophecy official charged over the hedge fund’s collapse. Two other executives, John Hughes and Jeffrey Spotts, have also been charged.
Hughes pleaded guilty and is cooperating with prosecutors. Spotts pleaded not guilty and faces trial next year. The two men and Kahn also have been sued by the SEC over the Prophecy collapse.
Bloomberg News contributed to this report.
Chatty bots are sharing their hot takes through hundreds of thousands of AI-generated podcasts. And the invasion has just begun.
Though their banter can be a bit banal, the AI podcasters’ confidence and research are now arguably better than most people’s.
“We’ve just begun to cross the threshold of voice AI being pretty much indistinguishable from human,” said Alan Cowen, chief executive of Hume AI, a startup specializing in voice technology. “We’re seeing creators use it in all kinds of ways.”
AI can make podcasts sound better and cost less, industry insiders say, but the growing swarm of new competitors entering an already crowded market is disrupting the industry.
Some podcasters are pushing back, requesting restrictions. Others are already cloning their voices and handing over their podcasts to AI bots.
Popular podcast host Steven Bartlett has used an AI clone to launch a new kind of content aimed at the 13 million followers of his podcast “Diary of a CEO.” On YouTube, his clone narrates “100 CEOs With Steven Bartlett,” which adds AI-generated animation to Bartlett’s cloned voice to tell the life stories of entrepreneurs such as Steve Jobs and Richard Branson.
Erica Mandy, the Redondo Beach-based host of the daily news podcast called “The Newsworthy,” let an AI voice fill in for her earlier this year after she lost her voice from laryngitis and her backup host bailed out.
She fed her script into a text-to-speech model and selected a female AI voice from ElevenLabs to speak for her.
“I still recorded the show with my very hoarse voice, but then put the AI voice over that, telling the audience from the very beginning, I’m sick,” Mandy said.
Mandy had previously used ElevenLabs for its voice isolation feature, which uses AI to remove ambient noise from interviews.
Her chatbot host elicited mixed responses from listeners. Some asked if she was OK. One fan said she should never do it again. Most weren’t sure what to think.
“A lot of people were like, ‘That was weird,’” Mandy said.
In podcasting, many listeners feel strong bonds to hosts they listen to regularly. The slow encroachment of AI voices for one-off episodes, canned ad reads, sentence replacement in postproduction or translation into multiple languages has sparked anger as well as curiosity from both creators and consumers of the content.
Augmenting or replacing host reads with AI is perceived by many as a breach of trust and as trivializing the human connection listeners have with hosts, said Megan Lazovick, vice president of Edison Research, a podcast research company.
Jason Saldanha of PRX, a podcast network that represents human creators such as Ezra Klein, said the tsunami of AI podcasts won’t attract premium ad rates.
“Adding more podcasts in a tyranny of choice environment is not great,” he said. “I’m not interested in devaluing premium.”
Still, platforms such as YouTube and Spotify have introduced features for creators to clone their voice and translate their content into multiple languages to increase reach and revenue. A new generation of voice cloning companies, many with operations in California, offers better emotion, tone, pacing and overall voice quality.
Hume AI, which is based in New York but has a big research team in California, raised $50 million last year and has tens of thousands of creators using its software to generate audiobooks, podcasts, films, voice-overs for videos and dialogue generation in video games.
“We focus our platform on being able to edit content so that you can take in postproduction an existing podcast and regenerate a sentence in the same voice, with the same prosody or emotional intonation using instant cloning,” said company CEO Cowen.
Some are using the tech to carpet-bomb the market with content.
Los Angeles podcasting studio Inception Point AI has produced its 200,000 podcast episodes, accounting for 1% of all podcasts published on the internet, according to CEO Jeanine Wright.
The podcasts are so cheap to make that they can focus on tiny topics, like local weather, small sports teams, gardening and other niche subjects.
Instead of a studio searching for a specific “hit” podcast idea, it takes just $1 to produce an episode so that they can be profitable with just 25 people listening.
“That means most of the stuff that we make, we have really an unlimited amount of experimentation and creative freedom for what we want to do,” Wright said.
One of its popular synthetic hosts is Vivian Steele, an AI celebrity gossip columnist with a sassy voice and a sharp tongue. “I am indeed AI-powered — which means I’ve got receipts older than your grandmother’s jewelry box, and a memory sharper than a stiletto heel on marble. No forgetting, no forgiving, and definitely no filter,” the AI discloses itself at the start of the podcast.
“We’ve kind of molded her more towards what the audience wants,” said Katie Brown, chief content officer at Inception Point, who helps design the personalities of the AI podcasters.
Inception Point has built a roster of more than 100 AI personalities whose characteristics, voices and likenesses are crafted for podcast audiences. Its AI hosts include Clare Delish, a cooking guidance expert, and garden enthusiast Nigel Thistledown.
The technology also makes it easy to get podcasts up quickly. Inception has found some success with flash biographies posted promptly in connection to people in the news. It uses AI software to spot a trending personality and create two episodes, complete with promo art and a trailer.
When Charlie Kirk was shot, its AI immediately created two shows called “Charlie Kirk Death” and “Charlie Kirk Manhunt” as a part of the biography series.
“We were able to create all of that content, each with different angles, pulling from different news sources, and we were able to get that content up within an hour,” Wright said.
Speed is key when it comes to breaking news, so its AI podcasts reached the top of some charts.
“Our content was coming up, really dominating the list of what people were searching for,” she said.
Across Apple and Spotify, Inception Point podcasts have now garnered 400,000 subscribers.
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