Alphabet and Amazon booked over $150 billion in one-quarter paper gains from their AI stakes

Alphabet's and Amazon's second-quarter results, filed within a week of each other in late July, each contained the same anomaly: a single accounting line, unconnected to selling ads or cloud compute, large enough to explain nearly the entire quarter's profit. Alphabet's "other income" was a net gain of $98.0 billion, which the company's own release says was "primarily the result of net unrealized gains on our equity securities." Amazon's was smaller but structurally identical -- $53.4 billion, which Amazon's own earnings release calls "primarily from our investments in Anthropic." Neither dollar has been spent, sold, or banked. Both are markups: the paper value of a private stake in a company that just raised money at a higher price.

The scale matters as much as the mechanism. Alphabet reported $112.2 billion in net income for the quarter, up 298% year over year; $98.0 billion of that -- 87% of the entire figure -- was the equity markup, not search ads or cloud revenue. Amazon reported $62.6 billion in net income against $27.5 billion in actual operating income; the $53.4 billion Anthropic markup made up 85% of what the company reported as profit. Strip the markups out of both companies and the underlying business each had a solid, unremarkable quarter. Leave them in, and Alphabet's profit growth looks nearly ten times what its operations actually delivered.

Neither company was first to show this pattern this earnings season, just the largest. Microsoft disclosed a $3.2 billion gain on its own Anthropic stake in its fiscal fourth quarter, reported July 29 -- offset, in the same three months, by a $600 million markdown on its OpenAI stake, a reminder that these marks move in both directions, and that Microsoft accounts for the two investments under different methods entirely. Four weeks later, Salesforce reported that $2.53 of its $5.90 in adjusted per-share profit -- 43% of the headline number investors reacted to -- came from an unrealized gain on its own Anthropic stake, not from the Claudeforce partnership it was announcing the same day. Alphabet and Amazon didn't invent this earnings-season story; combined, their marks alone run to roughly 47 times the size of Microsoft's single Anthropic gain.

Those three numbers aren't fully comparable, and that's the point: Alphabet's figure is a portfolio-wide total that may include SpaceX and other holdings alongside Anthropic, while Amazon's and Microsoft's are each pinned to Anthropic specifically. Different companies also account for these stakes under different rules. Microsoft uses the equity method for OpenAI, recognizing a share of OpenAI's own reported gains and losses -- which is why its OpenAI mark can go negative in a quarter its Anthropic mark goes positive. Alphabet and Amazon instead use fair-value accounting for their AI stakes, marking to the price of Anthropic's most recent funding round. Two structurally similar bets, filed by companies competing in the same market, can therefore produce numbers that aren't measuring the same thing -- which is exactly the comparison a reader assembling four separate earnings reports would otherwise have to reconstruct alone.

None of this is improper accounting -- it's what U.S. rules require once a company holds a stake large enough to need fair-value treatment, and analysts have pushed back publicly rather than staying quiet about it. The gains are real under the accounting rules that govern them, and just as real in the sense that they could vanish just as fast. A lower price at Anthropic's next funding round, or a public listing below its last private mark, would reverse every one of these marks at once, across every company holding the stake.

"The headline earnings numbers were very much inflated by equity gains in OpenAI, Anthropic and SpaceX ... these types of moves tend to even out over time, which is why we typically exclude them from a non-GAAP view and from forecasts." -- Gil Luria, head of technology research, D.A. Davidson

The stakes producing these marks aren't passive investments -- they're bundled with the cloud-spending deals that make Anthropic one of each company's own customers. Amazon's $5 billion Anthropic investment, made in 2026, came paired with Anthropic's commitment to spend more than $100 billion on AWS over the following decade for up to 5 gigawatts of compute capacity. Microsoft's November 2025 stake was struck alongside a $30 billion Azure-purchase commitment from Anthropic. The mechanism these deals share is what critics call circular financing: the investor's cloud division books the revenue when Anthropic spends the money, and the investor's equity stake gets marked up when that spending helps justify Anthropic's next, higher-priced funding round -- two separate line items on the same company's income statement, both moving in the same direction, off the same underlying relationship.

Whether that loop is a problem or just how AI infrastructure gets built this decade depends on who you ask.

Add up only the three figures each company has actually disclosed as an income-statement gain -- Alphabet's $98.0 billion, Amazon's $53.4 billion, and Microsoft's $3.2 billion -- and this earnings season's AI stakes produced at least $154.6 billion in reported gains from three companies alone. That excludes Nvidia, which discloses its position differently: an SEC filing in mid-August put the value of Nvidia's SpaceX stake -- 122.8 million shares -- at $21 billion, a figure that had already fallen to roughly $17 billion as SpaceX's stock cooled in the two months since its June IPO. Every one of these numbers will move again next quarter, in whichever direction the next valuation event points them.