Paper profits in the billions of dollars have accrued to Alphabet and Amazon on account of their significant investment in Anthropic, the leading artificial intelligence startup which is well-known for its Claude chatbot. The two tech giants recorded third-quarter earnings that exceeded forecasts, with both profiting mainly from the rise in the value of their Anthropic ownership interests. The Google parent made a quarter profit of $13.1 billion, which included $10.7 billion in net gains on equity securities – some of which came from its Anthropic investment. Amazon, meanwhile, saw its profit climb 38% to $7.2 billion, with the $9.5 billion pretax gain on its Anthropic stake among the key contributors to the rise. The rise in the value of the two companies’ Anthropic holdings follows its highly successful $13 billion funding round, which valued it at around $183 billion, almost three times more than the last time it raised capital and one of the most valuable private startups in the world.
Overall, Alphabet has invested approximately $3 billion in Anthropic, which does not factor in a strategic agreement for Google Cloud to provide the startup with specialized AI chips from 2026 and beyond, which could potentially be worth tens of billions. Amazon, by contrast, has injected $8 billion in the capacity of investments, and it works with Anthropic closely as it is currently building a custom network of data centers and AI chips to feed Anthropic’s models using its own resources. These investments suggest that generative AI technologies already have a substantial financial presence for the major tech companies, and strategic investments are providing an incredible unrealized financial profit that is concentrated in their balance sheets.
During its expansion, Anthropic has ceaselessly grown its revenue run rate to over $5 billion and its customer base to 300,000 businesses, which is nearly seven times larger than one year ago. For comparison, Anthropic is the largest contributor to the AI start-up ecosystem globally, following OpenAI in magnitude of valuation due to an immense explosion in AI funding internationally.
At the same time, Regardless, of the different story, there is on AI investments, but Microsoft shows a different story where its investments in AI turn to be influencing its declining of net income by $3.1 billion attributable to losses from investing in OpenAI, this shows that AI is very much high-risk investment with high flattening speed.
Finally, it is clear that Alphabet and Amazon’s strategic investments in Anthropic have grown to create huge “on paper” profits demonstrating therefore the increasing financial power of AI startups in the tech industry and also, the growing business and technological opportunities developed.
Alphabet’s Gains
- Alphabet made a profit of $10.7 billion in the third quarter, mostly from Anthropic’s equity securities.
- Alphabet put about $3 billion into Anthropic.
- Anthropic will get special AI chips from Google Cloud starting in 2026, which is worth billions of dollars.
Amazon’s Gains
- Amazon’s profit for the third quarter went up 38%, thanks to a $9.5 billion pretax gain from Anthropic.
- Amazon has put $8 billion into Anthropic and is helping the startup with specialized AI infrastructure.
Anthropic’s Growth
- Anthropic got $13 billion in a funding round, which almost tripled its value to $183 billion.
- The company makes more than $5 billion a year and has more than 300,000 business customers.
Industry Impact
- The investments show how generative AI has gone from being a risky bet to a major financial asset on tech companies’ balance sheets.
- Microsoft lost $3.1 billion in net income because of its investments in OpenAI. This shows that AI investment strategies can have different results.