Alphabet, Amazon, Nvidia, and Microsoft collectively booked more than $160 billion in unrealized gains during the second quarter of 2026, all from the rising valuations of their stakes in private AI companies. That figure more than doubled from roughly $69 billion the prior quarter.
The gains, classified as “other income” on financial statements, are technically real under current accounting rules. But they represent paper wealth, not cash.
Where the money came from (on paper)
Alphabet led the pack with $97.9 billion in other income for the quarter ending June 30, 2026. That figure more than doubled from the previous quarter, driven by surging valuations of companies it has backed in the AI space.
Amazon’s other income hit $53.4 billion, more than tripling the prior quarter’s total.
The largest single driver appears to be SpaceX, which went public in June 2026 at a market valuation of $1.77 trillion. Nvidia alone held nearly 123 million shares in SpaceX as of June 30, meaning the IPO crystallized an enormous mark-to-market gain on its balance sheet.
Anthropic’s valuation reportedly climbed to approximately $965 billion during the same period.
Accounting rules meet AI hype
Under current US accounting standards, companies holding equity stakes in other firms must recognize changes in fair value through their income statements. When a private company raises a new round at a higher valuation, or goes public at a premium, the investor gets to book the difference as income.
The result is that headline earnings at these companies now contain a significant component that has nothing to do with selling cloud services, advertising, or chips. A quarter where Alphabet reports nearly $98 billion in “other income” is a quarter where traditional operating metrics get buried under a mountain of mark-to-market accounting.
The circular economy of AI valuations
Big Tech companies invest billions in AI startups. Those startups use the capital to buy cloud computing services and chips from Big Tech companies. The startups’ valuations rise, boosting Big Tech’s reported profits, which in turn supports higher stock prices that give these companies more capital to deploy into the next round of AI investments.
With Anthropic and OpenAI both anticipated to pursue public offerings, if Anthropic, valued at roughly $965 billion in private markets, were to go public and trade below that mark, every company holding its shares would need to write down the position. The same unrealized gains mechanism that inflated profits on the way up would deflate them on the way down.
The gap between the prior quarter’s $69 billion in combined gains and this quarter’s $160 billion-plus illustrates just how sensitive these figures are to timing. A single IPO or funding round can swing reported profits by tens of billions of dollars.