Anthropic has not yet officially filed a public prospectus ahead of its hugely anticipated Initial Public Offering (IPO), but the AI startup is already quietly reshaping the earnings of two of the world's largest companies.
Both Amazon (NASDAQ: AMZN) and Alphabet (NASDAQ: GOOGL) are major backers of Anthropic, and as the AI firm's private valuation has soared, the paper value of those stakes has flowed straight into their bottom lines.
Now, the easy, straightforward interpretation is that this is a windfall. The more important one is that a public listing would turn that one-way boost into a two-way street.
A Markup, Not a Sale
The numbers are simply staggering.
Amazon's first-quarter net income included $16.8 billion in pre-tax gains from its Anthropic investments.
In the second quarter, its net income included $53.4 billion in non-operating pre-tax income, which the company said came primarily from Anthropic.
For perspective, Amazon's operating income for the quarter was $27.5 billion.
In other words, the paper gain on its Anthropic stake was nearly double what the entire sprawling business, from AWS to retail to advertising, earned from operations.
Alphabet tells a similar story. Its second-quarter other income reflected a net gain of almost $99 billion, primarily from net unrealized gains on its equity securities.
That figure dwarfed the company's operating income of $40.8 billion for the same period and helped rocket net income to $112.1 billion.
It is worth noting that $99 billion is not all from Anthropic. It includes gains on other holdings, such as Alphabet's stake in SpaceX (NASDAQ: SPCX).
But Anthropic's rising valuation is a meaningful part of the picture, and the broader point holds.
A huge share of the reported profit came from investments being marked higher, not from selling ads or cloud services.
Why a Public Price Changes Everything
Here is the catch that the windfall framing misses. These gains are, of course, unrealized. They reflect Anthropic's valuation in private funding rounds, adjusted on paper, with not a dollar actually changing hands. As long as that valuation keeps climbing, the markups keep padding earnings. But the moment Anthropic trades on a public exchange, both stakes are tied to a live market price, one that can fall as easily as it rises.
That introduces volatility these companies haven't had to contend with in the same way. A private valuation gets reset every so often, and almost always upward in a hot, long-standing bull market. A public stock reprices every second of every trading day. If Anthropic lists and its shares later slide, Amazon and Alphabet could be forced to book sizable paper losses in a future quarter, the mirror image of the gains inflating earnings today. The same accounting rule that has been a tailwind could become a headwind.
Both Companies Wear 2 Hats
Both Amazon and Alphabet are not only significant owners of Anthropic but also suppliers to it. Anthropic runs its Claude models across a multi-cloud setup, and both giants sell it the infrastructure to do so.
Amazon remains Anthropic's primary training partner, and Anthropic has agreed to secure up to five gigawatts of Amazon's Trainium chips to train and run its models. Alphabet struck its own landmark deal with Anthropic to access up to roughly 1 million of Google's custom TPUs, bringing well over 1 gigawatt of computing capacity online in 2026. In both cases, the arrangement sends real, recurring cash revenue back to the parent through its cloud and custom-silicon business.
That dual role matters because it cuts in each company's favor. Even if the value of their equity stakes swings around once Anthropic is public, the underlying chip-and-cloud relationships keep generating operating income regardless of where the stock trades. It's an important reminder that beneath the headline-grabbing paper gains is a genuine, cash-generating business tie between Anthropic and its two largest backers.
What Investors Should Take Away
For now, both Amazon and Alphabet are enjoying the upside of owning a piece of one of the most valuable private companies in artificial intelligence. But investors should be careful not to mistake these markups for operational strength. Much of the recent profit growth at both firms reflects Anthropic's rising valuation, not the performance of their core businesses. Investors should view it separately when judging how the underlying operations are really performing.
A public listing would bring transparency, finally putting a hard market price on these stakes. It would also bring volatility, converting a reliable source of paper profit into something far less predictable. When Anthropic finally files and lists, the market will not just be pricing a new AI company. It will be setting the value of one of Amazon's and Alphabet's biggest recent profit drivers, for better or worse.
The article "Anthropic's IPO Could Put Amazon's and Alphabet's Paper Profits to the Test" first appeared on MarketBeat.
