The End of an Era: Warren Buffett Steps Down As Berkshire Hathaway Chairman

Warren Buffett steps down as chairman of Berkshire Hathaway, closing out a chapter in investing history. Plus, private equity was already having a hard year, then came higher interest rates. "When that industry is hurting, it affects the whole financial system." And why Disney just hired its first Chief Technology Officer. It's Friday, September 18th. "I'm Alex O'Solev for the Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today." Warren Buffett is stepping down as chairman of Berkshire Hathaway. He announced the news today in a letter to investors. Buffett will remain on the board and become chairman Emeritus. He'll be succeeded as chairman by his son Howard. WSJ Deputy Markets editor Justin Bear joins me now with more. Justin Buffett had already stepped down as CEO at the end of last year. Why is he stepping down as chairman of the board and why now? "He's 96 years old. Probably the biggest reason for that. People close to him described his health as being pretty stable and good given his advanced age. He did have a bad fall a few months ago, which he mentioned. So there are factors there to consider. And something he said since last year is that he had really started to feel his age for the first time in his life and was slowing down. That was May of 2025, flash forward more than a year later. He's at a different place even than probably he was then." Yeah, he wrote in his letter "Father Time Always Wins," which is quite a strong statement, I think. You mentioned Howie Buffett, his son. What is Howie's background to take over his chairman? "Well, that's the thing. On your normal circumstances, Howie would be a very unusual choice. He didn't spend his life and career inside Berkshire, really any traditional corporate environment. He's run a farm. He served in office as a sheriff for a while. He has though been on the board at Berkshire for more than 30 years. And he has really been kind of a lifelong student of his father's business life. Going back to being a kid, hearing him, talking on the phone with people and being curious what his father was up to and what those calls were about. In time, his father recognized him as probably the best person to step in as chairman whenever that time came." Greg Abel took over his CEO just at the start of this year. So what will his relationship be like with Howie and how they divide these leadership responsibilities? Greg has been their party Berkshire for a long time so they know one another, been on the board together for a number of years as well. They have much different roles. Greg is sort of the ultimate operator. He's run businesses. He's done deals. He has done all the things you would expect a CEO to have done over the course of his career. Howie is not that does not have that experience but knows probably better than almost anyone. His father's vision and what he hoped would endure once Warren Buffett himself was no longer there. You know, this year has been kind of a tough one for Berkshire. It stock has been trailing the S&P. Is this the moment of opportunity for a new leader or a really difficult one to be taking the reins? It's very clear they're stepping into a very kind of uneasy place for this place that has been known for its stability and its performance over many, many decades. All of that was directly linked to the guy who was running it. Suddenly, the guy is not running it. There are all sorts of questions that come up about how sustainable the business model is with this business should do. Should they spend more money on deals? Should they offer investors a dividend? Should they break it up? All these things that always swirl around Berkshire even in Warren's day, but now that he's stepped down, all that goes louder. That was WSJ deputy markets editor Justin Bear. Thank you, Justin. Anytime US indexes were mixed today. The NASDAQ was up nearly 0.4% with shares of hyperscalers, chip makers and data storage providers climbing. The S&P 500 was up about 0.2%. While the Dow fell almost 0.2%. Much of investor's attention today was on bonds as global government bond yields rose. The 10-year treasury yield went above 5% again and the two-year yield ended the day at its highest level since July 2024. Oil prices inched down with Brent crude settling at $103.87 a barrel. Following the Fed's first interest rate hike in three years earlier this week, everyone from individual investors to Wall Street is figuring out what it means for them. That's especially true for private equity. Our reporter Mark Mauer says the industry had already been having a tough time lately. Private equity has been in a tough spot in recent years because of a slower pace of fundraising and deal-making. A lot of that pain stems from deals that were struck in 2020 and 2021 at near-zero interest rates and high valuations and firms are finding it difficult to exit companies that they bought at those prices. The impact of rising interest rates could be particularly strong for private equity. Private equity funds control a large amount of money in the US, more than $2 trillion. So, when that industry is hurting, it affects the whole financial system. Higher interest rates affect private equity firms in various ways. It increases what companies they own have to pay on loans and makes it more difficult to sell companies at a good price. And ideally, firms sell companies for a profit within 10 years. They pay back the loans, they collect the fee, and they return a balance to their investors. That's becoming a lot more difficult. This month, the stocks of big alternative fund managers like Apollo, Blackstone, and KKR have dropped while talk of interest rate increases picked up. And private equity fundraising is on pace for its worst years since at least 2020, according to pitch book, as institutional investors slow the pace of their commitments. Coming up, Disney has created a new executive role as itself its tech ambitions. That story and more after the break. Anthropic plans to stage is blockbuster initial public offering in November, later than many investors expected, as leaders of the biggest companies in the artificial intelligence race call for a slowdown in the development of the technology. The AI giant had been expected to stage a record-breaking offering in October, according to people familiar with the matter. The caution the timing could still change. Investors have expected Anthropic to be valued at around $2 trillion and raise up to $100 billion in the offering, both figures that would top records set by SpaceX's June debut. In other tech news, Disney has hired the head of character AI to be its first ever chief technology officer. The company said today that Karen Deep Anand will oversee Disney's internal technology and infrastructure, data and AI platforms, and product and engineering teams reporting directly to CEO Josh Demarro. Ben Fritz, who covers the entertainment industry for the journal, says the new role is part of Demarro's tech revamp for the company. Disney is great at building big theme park rides and tentpole movies that you got to see, but building technology that connects them directly to audiences online at the speed audiences and moving online is something they're just struggling with. And Disney definitely wants to move to a place where their entertainment becomes more interactive online, where it's not just a one-way street to get the latest sequel to Frozen, let's say, or Star Wars installment or whatever, and having people who have very successfully built interactive entertainment apps and characters online is certainly in keeping with where Disney intends to go. Anand is coming from character AI, a company that made headlines in the past few years because teenagers killed or harmed themselves after interacting with the company's AI, and their families sued the company. The incidents were before Anand's tenure, and the company settled the suits earlier this year. Ben says Disney took into account how Anand handled the controversy. Disney said when they hired Anand that he made trust and safety priority that's a platform scaled, and that's part of what he was brought in to do a character AI last year, and that's what they're counting on. But when your intellectual property becomes interactive, it's much harder to control the experience, and there's much higher risk of things happening that a minimum reflect badly on you and that the worst could actually cause damage in the world. And that's a risk that Disney's having to take on as they try to engage with this new world of AI and interact immediately. President Trump said today that he's banning CNN, MSNOW, and Politico from the White House over their coverage of his administration. He said the ban would take effect immediately and that he planned to ban other outlets in the future. The White House and representatives from CNN, MSNOW, and Politico didn't immediately respond to requests for comment. Volkswagen has slashed its full-year profit forecast. It now expects an operating return on sales of up to 1% this year, down from its prior estimate of between 4 and 5.5%. The profit warning comes as the automaker contends with challenges, including US tariffs, rising manufacturing costs, and increasingly fierce competition from Chinese automakers in both China and Europe. The new forecast, which was announced just before the market closed in Germany, sent Volkswagen shares down more than And Iran's state media says hundreds of thousands of government supporters took to the streets of Tehran today in a defiant display of military power. It was one of the largest gatherings of its kind since the U.S. and its really attacks that sparked the war in late February. The government organized rally was time to coincide with a milestone this week. It's now been 200 days since the war began. Iran has marshalled its supporters to the streets regularly to project its power and prevent more protests after brutally suppressing and uprising that began late last year over economic grievances. Human rights groups say security forces killed thousands of people putting down the demonstrations in January. And that's what's news for this week. Tomorrow you can look out for our weekly markets wrap up what's news in markets. Then on Sunday we'll be discussing what disruption in the Middle East means for global energy markets. That's in what's news Sunday. And we'll be back with our regular show on Monday morning. Today's show is produced by Danny Lewis and Anthony Bansy with supervising producer Katie Ferguson. Michael Laval wrote our theme music. I shall miss our development producer Chris Sinsley is our deputy editor. Lee Tal Malad is our senior director of shows. And Samantha Henneck is the Wall Street Journal's head of multimedia. I'm Alex Sosala. Have a great weekend and thanks for listening. [BLANK_AUDIO]