Behind Google's Record Profit: 87% Comes from Unrealized AI Equity Gains
JensHonack · x · 2026-07-23
Google's recent quarterly net income hit a record $112 billion, but a staggering $98 billion (approx. 87%) of that actually comes from unrealized gains on equity stakes in AI companies like SpaceX and Anthropic, rather than cash.
This accounting treatment is a double-edged sword: Google benefits not only from holding the equity but also from Anthropic's commitment to purchasing massive amounts of Google TPU capacity, further boosting cloud revenue. However, if the valuations of these companies fall in the future, those paper gains will directly reverse out of net income.
Related event: Google Cloud Doubles in Q2 but AI Spending Turns Free Cash Flow Negative(60 posts)→
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