Half of Google’s and Amazon’s ‘blowout AI profits’ came from a stake in Anthropic—not from their actual business
Alphabet and Amazon reported record profits in the first quarter of 2026, with nearly half of their gains attributed to increased valuations of their equity stakes in AI startup Anthropic rather than core business operations. The surge in profit is tied to accounting rules that require companies to mark up the value of private investments after new funding rounds, which both firms participated in. While the accounting is standard, critics note the potential conflict of interest as their own investments help inflate the valuations that generate reported profits.
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Four of the largest U.S. tech companies reported earnings Wednesday afternoon, confirming an AI capital expenditure buildout without modern precedent. Recommended Video Combined, they spent $130.65 billion on capital expenditures in the first three months of 2026—more than three times the inflation-adjusted cost of the Manhattan Project, in a single quarter. They plan to spend nearly $700 billion this year alone, as much as the U.S. government spends on Medicare. The headline profits suggest that the bet is paying off; Google parent Alphabet’s profit jumped 81% to $62.6 billion last quarter, while Amazon Web Services delivered its fastest growth in fifteen quarters. Yet a footnote in each company’s earnings release tells a different story about the origins of these profits.
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