Alphabet books $16.8bn one-off pre-tax gain from Anthropic investment
- Amazon said first-quarter 2026 profit was boosted by a $16.8 billion pre-tax gain on its Anthropic stake, while Berkshire’s Greg Abel preached selective AI use. - The gain sat in Amazon’s non-operating income and helped lift net income to $30.3 billion, as AWS sales rose 28% and capex kept surging. - Together, they show the AI boom is minting paper wins fast, but old-line managers still want proof before going all in.
AI investing is starting to show up in earnings in a very weird way. Not just through cloud sales or chip demand, but through giant accounting gains on startup stakes. That is the real news here. Amazon’s first-quarter 2026 results, released on April 29, included a $16.8 billion pre-tax gain tied to its investment in Anthropic, while at Berkshire Hathaway’s annual meeting on May 2, Greg Abel made the opposite point — AI should be used where it clearly helps, not just because everyone else is doing it. ### Wait — was this Alphabet? No. The headline framing is off. The $16.8 billion one-off gain was booked by Amazon, not Alphabet. Amazon said plainly that first-quarter 2026 net income included pre-tax gains of $16.8 billion in non-operating income from its investments in Anthropic. What did Amazon actually report? Amazon reported first-quarter net sales of $155.7 billion, up 15% year over year excluding currency effects, and net income of $30.3 billion, or $2.78 a share. AWS sales rose 28% to $37.6 billion, and operating income reached $23.9 billion. But the standout number was that Anthropic-related gain sitting outside the core business in non-operating income. ### Why does “non-operating” matter? Because it tells you this was not profit generated by selling more goods, more ads, or more cloud services. It was basically a mark-up in the value of Amazon’s Anthropic stake. That can make a quarter look dramatically stronger even though it does not say much. Earnings growth jumped this reporting week. ### What does this say about Anthropic? It says Anthropic’s value has risen enough to create a very large paper gain for one of its backers. Amazon is not alone here — the company’s filing also shows earlier Anthropic-related gains from conversions of convertible notes into preferred stock. Basically, one frontier AI startup is now large enough to move the quarterly profits of one of the world’s biggest companies. ### Where does Alphabet fit in? Alphabet’s own first-quarter story was different. It reported strong AI-driven growth across Search, Cloud, and subscriptions. On the April 29 earnings call, Sundar Pichai said Cloud revenue grew 63% and topped $20 billion for the first time, with backlog nearly doubling quarter over quarter to more than $460 billion. So Alphabet is very much in the same AI race — just not via this Anthropic gain. ### And then Berkshire said: slow down? More or less. At Berkshire’s May 2 annual meeting, Greg Abel said the conglomerate would not do AI for its own sake. His message was that Berkshire will use the technology where it improves operations and profits, but it is not going to chase hype. That is a very Berkshire answer — practical, selective, and allergic to fashionable spending. ### Why do these two stories belong together? Because they show the two faces of the AI boom. One face is financial — startup valuations are exploding fast enough to create multibillion-dollar gains on corporate balance sheets. The other is operational — big companies still have to decide whether AI actually saves time, lifts margins, or builds a durable product. One is excitement. The other is discipline. ### What is the real takeaway? The clean read is not “AI is overhyped” or “AI is printing money.” It is that both things can be true at once. Capital markets are rewarding AI exposure aggressively, sometimes before the business impact is fully visible. But managers like Abel are reminding investors that the lasting value comes later — when the tool changes costs, speed, or revenue in the real business.
