The AI windfall has arrived.
In the third quarter, Alphabet Inc. posted a $10.7 billion uptick in net gains on equity securities, while Amazon.com Inc. logged a $9.5 billion pretax gain tied to its investment in Anthropic PBC — the startup behind the Claude chatbot.
These windfalls reflect how major tech players are already turning generative-AI bets into headline earnings, even as real-world returns from the technology lie ahead.
Key Takeaways
- Big tech’s AI startup stakes are now showing up in quarterly profits.
- Alphabet’s $10.7 billion gain and Amazon’s $9.5 billion mark-to-market boost stem from Anthropic.
- These gains remain largely paper profits — created by valuation shifts, not sales.
- Not all AI bets are paying off: one rival tech giant took a multibillion-dollar loss.
- The phenomenon signals a turning point: AI investments are moving from long-term bet to current P&L driver.
Alphabet and Amazon saw major profit boosts in Q3 thanks to their stakes in Anthropic. Alphabet recorded a $10.7 billion net gain on equity securities and Amazon reported a $9.5 billion pretax gain — both driven by the rising valuation of the AI startup.
The numbers behind the surge
In its Q3 earnings release, Alphabet disclosed that its profit “included net gains on equity securities of $10.7 billion” — with a large portion linked to a private company signalled by Bloomberg as Anthropic.
Meanwhile, Amazon’s third-quarter profit jumped about 38 % to roughly $21.2 billion, helped by a $9.5 billion pretax gain derived from its Anthropic investment.
In September, Anthropic closed a funding round raising about $13 billion, valuing the company at $183 billion — a figure that triggered the mark-to-market recalculations.
Why the boost came now
- Companies that hold stakes in private firms must periodically adjust the value of those holdings when the market valuation shifts — even if no sale has taken place.
- The recent funding round at Anthropic triggered a valuation leap, which translated into accounting gains for Alphabet and Amazon.
- These gains are non-operating in nature — meaning they reflect investment value changes rather than core business revenue growth.
Inside the AI stake strategy
Alphabet has invested around $3 billion in Anthropic (including $2 billion in 2023 and $1 billion in early 2025) and sealed a deal to supply the startup with a million AI chips starting in 2026 via Google Cloud.
Amazon committed about $8 billion to Anthropic and built a massive infrastructure project (code-named Project Rainier) with custom chips and data centres to support the startup’s needs.
AI gains vs. AI pains — not all tech giants win
The good news for Alphabet and Amazon is tempered by the contrasting result at Microsoft Corporation. Microsoft reported a net income reduction of about $3.1 billion tied to its investment in OpenAI.
This juxtaposition underscores the volatility in private-AI investing: high upside exists — but so do marked downsides.
Broader implications — What this means for the tech sector
- AI investment is no longer purely speculative. It’s already influencing earnings reports for global tech giants.
- For investors, it signals that private-startup stakes may become meaningful financial levers rather than side bets.
- For rivals and regulators, it raises questions about how value is booked and whether this dynamic could fuel valuation bubbles.
- For readers and businesses, it illustrates how the AI arms race is already reshaping the financial terrain — not just future product wars.
What happens next — Risks and possibilities
- If startup valuations remain buoyant, expect future quarters to show more mark-to-market gains across similar investments.
- But if valuations reverse or remain static, companies could face write-downs or slower earnings growth.
- Watch how regulators respond: large disclosures of private investment gains raise transparency and accounting-treatment issues.
- Keep an eye on the infrastructure arms race (e.g., chips, data centres) as the underlying business cost of supporting AI continues to rise.
Conclusion
The recent quarterly filings of Alphabet and Amazon show that the AI revolution is already rewriting balance sheets. Gains previously hidden as high-risk bets are now visible — even if they’re largely paper profits today. While the findings offer a bullish signal for AI’s financial lift-off, they also come with caution: volatility looms, and infrastructure and valuation risks remain. For readers, the takeaway is clear: the AI wave isn’t just about smart software anymore — it’s turning into big money, real earnings and new competitive pressure.