AI BriefingHalf of Google and Amazon's Profits Come from Anthropic Gains
Key point
Over half of Google and Amazon's strong AI-driven earnings came from valuation gains on their Anthropic stakes.
Details
Alphabet's net income jumped sharply last quarter after reflecting $3.69 billion in equity valuation gains, a significant portion of which came from the rise in Anthropic's value.
Amazon also disclosed that its Q1 net income included a pre-tax gain of $16.8 billion from its Anthropic investment. This corresponds to more than half of Amazon's quarterly pre-tax profit.
The key point is that this profit did not come from core businesses like search advertising or cloud, but from the revaluation of equity stakes in a private AI company.
- Alphabet and Amazon are major investors in Anthropic.
- Anthropic's new investment round triggered a revaluation of equity stakes.
- It was pointed out that investment and cloud deals could simultaneously push up Anthropic's valuation.
- Fair-value accounting for private equity stakes, applied since 2018, was cited as an example of increased quarterly earnings volatility.
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