Alphabet and Amazon recently made investors happy by reporting better-than-expected profits for the third quarter. A big reason for this boost at both companies was the increased value of their investments in Anthropic PBC, the company behind the popular Claude chatbot.
Alphabet mentioned that its profit included a huge “net gain on equity securities of $10.7 billion,” partly from a private company. People familiar with the situation, who wished to remain unnamed, confirmed that this company is Anthropic. Similarly, Amazon’s third-quarter profit jumped by 38%, thanks to a $9.5 billion pre-tax gain from its investment in Anthropic. Amazon noted this higher value in its non-operating income for the period.
This trend shows that the big money flowing into private generative AI companies is now starting to affect the financial results of public companies. What used to be seen mostly as smart bets on a quickly changing field are now adding significant, even if not yet cashed-in, profits to some of the world’s largest businesses. This is happening even though the AI technology itself is just beginning to generate commercial income.
Alphabet and Anthropic chose not to comment on the matter. In September, Anthropic closed a $13 billion fundraising round, pushing its valuation to $183 billion—nearly triple its previous valuation. Companies have to update the value of their investments to reflect changes in market prices, even if they haven’t sold their shares yet.
This isn’t the first time Alphabet’s profits have risen due to changes in investment values. Back in April, the company announced its first-quarter earnings were boosted by $8 billion in gains from another private company investment—this time, Elon Musk’s Space Exploration Technologies Corp.
Meanwhile, Microsoft reported its own quarterly earnings, saying its net income dropped by $3.1 billion. This was to cover losses from OpenAI. Microsoft has invested $13.75 billion in the ChatGPT maker and owns a 27% stake.
Alphabet’s Google has already invested about $3 billion in Anthropic, with $2 billion in 2023 and another $1 billion this year. Google Cloud also announced this month that it would provide Anthropic with 1 million of its special AI chips starting in 2026. This will bring a lot of computing power online soon and is worth tens of billions of dollars.
Amazon is also backing Anthropic with an $8 billion investment. It built a large network of data centers and custom AI chips for the startup through Project Rainier. Amazon confirmed this week that this infrastructure is now up and running.
