Amazon's Stake in Anthropic Is Now Big Enough to Move Its Earnings. Here's How That Compares to Alphabet's Stake in SpaceX.
Amazon and Alphabet are benefiting from their massive investments in AI and space companies, but those investments come with greater exposure to private-market valuations and liquidity constraints.
Overview
Amazon's (NASDAQ: AMZN) investment in Anthropic has become something more than a side bet for the tech giant. In recent quarters, the company has reported over $50 billion in non-operating pretax income primarily tied to revaluations of its Anthropic stake, a contribution big enough to shift its headline profit numbers on its own. Amazon has put about $13 billion into Anthropic so far, and its filings show that stake to have a carrying value near $190 billion as Anthropic's private-market valuation has climbed toward the trillion-dollar mark.
Image source: Getty Images.
That financial stake sits atop a deep commercial partnership. Anthropic has agreed to spend more than $100 billion over 10 years on AWS technologies and Amazon's custom Trainium chips, locking in up to 5 gigawatts of compute capacity to train and run Claude models on Amazon's cloud. The result is that Amazon benefits twice -- once from the mark-to-market gains on its equity and again from Anthropic's long-term commitment to spend heavily with AWS.
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Originally published at www.fool.com.