Warren Buffett was long famous for avoiding investing in tech, a sector he saw as vulnerable to sudden and disruptive shifts in value. Photo / AP
Berkshire Hathaway is set to plough more than US$570 million ($860.8m) into the cloud database company Snowflake, marking a rare venture into the enterprise technology market by Warren Buffett after a failed bet on IBM.
The news came as Snowflake published an indicated price range for its upcoming initial public offering that valued the company at up to US$23.7 billion. The lofty valuation target, in the face of a sharp sell-off in tech stocks over the past week, points to the high expectations for the company, whose technology is purpose-built to handle large volumes of data in the cloud computing era.
In an update to its IPO filing on Tuesday, Snowflake revealed Berkshire Hathaway and Salesforce Ventures would buy US$250m of shares direct from the company at the time of its listing. Buffett's company will also buy another block of shares, worth more than US$320m, from one of the company's investors.
Buffett was long famous for avoiding investing in tech, a sector he saw as vulnerable to sudden and disruptive shifts in value. He broke that habit in 2011 with a big bet on IBM at a time when the US computer maker claimed to have built a rock-solid financial model that enabled it to project earnings five years into the future and avoid the normal volatility in the sector.