According to the Financial Times, tech giants recognized over $160 billion in pre-tax gains from AI and related company equity in their most recent fiscal quarter. Alphabet recorded $98 billion in other income, primarily from unrealized appreciation of equity securities; Amazon recognized $53.4 billion, mainly from its Anthropic investment.
Nvidia also recorded approximately $7.8 billion in equity gains; Microsoft recognized $3.2 billion in gains from its Anthropic investment, and its OpenAI investment added approximately $480 million to net profit.
These gains are already included in GAAP profits, but most do not generate current cash flow and cannot be replicated sustainably; if AI company valuations decline, they could even result in losses. However, Alphabet and Amazon's operating profits still grew by 30% and 43% respectively in the quarter. While the paper gains amplified the profit growth, this should not negate the growth of their core businesses.