Google and Amazon have already earned billions each from their investment in this AI startup

Google parent Alphabet and Amazon have each already realised significant gains on paper from their investments in the AI startup Anthropic. The increased valuation of these stakes boosted both companies' third-quarter (Q3) profits, which were reported this week. Alphabet reported that its profit included "net gains on equity securities of $10.7 billion.” A Bloomberg report, citing people familiar with the matter, confirmed that the company behind the Claude chatbot contributed to Google’s figures. Similarly, the e-commerce giant’s Q3 profit climbed 38%, helped by a $9.5 billion pretax gain from its investment in Anthropic, which was reflected in non-operating income. Google has invested about $3 billion in Anthropic, including $2 billion in 2023 and another $1 billion earlier this year. This month, Google Cloud agreed to provide the company with 1 million specialised AI chips starting in 2026, adding more than a gigawatt of computing capacity in the near future. That deal is reportedly valued in the tens of billions of dollars. Amazon is supporting Anthropic with an $8 billion investment and has built an extensive network of data centres and custom AI chips through its Project Rainier initiative. This week, Amazon said the infrastructure is already operational.This is not the first time Alphabet’s profits have been affected by changes in investment values. In April, the company reported that its first-quarter earnings rose by $8 billion in unrealised gains from an investment in a private firm, which was reportedly identified as Elon Musk’s SpaceX.The growing investments in private generative AI firms are now showing up in public company financials. What were once seen as long-term strategic bets are now adding significant, though unrealised, profits. For instance, Anthropic’s September funding round valued it at $183 billion, prompting investors to update their holdings’ valuations even without selling shares.Meanwhile, Microsoft said in its recent quarterly report that its net income fell by $3.1 billion due to losses related to OpenAI. The company has invested $13.75 billion in the ChatGPT developer and holds a 27% ownership stake.