Core Insights - Alphabet Inc. and Amazon.com Inc. reported better-than-expected third-quarter profits, largely driven by increased valuations of their investments in Anthropic PBC, the creator of the Claude chatbot [1][2] Financial Performance - Alphabet's profit included net gains on equity securities amounting to $10.7 billion, primarily from its investment in Anthropic [2] - Amazon's third-quarter profit rose by 38%, aided by a $9.5 billion pretax gain from its stake in Anthropic [2] Market Trends - The surge in investment in private generative AI companies is beginning to impact public company financial metrics, with AI startup stakes contributing significant unrealized profits [3] - Anthropic recently raised $13 billion in a funding round, tripling its valuation to $183 billion, which has prompted companies to update the value of their investments accordingly [4] Historical Context - Alphabet's profits have previously been boosted by changes in investment values, including an $8 billion unrealized gain from SpaceX in the first quarter of the year [5] Competitive Landscape - Microsoft reported a $3.1 billion reduction in net income due to losses from its investment in OpenAI, highlighting the volatility in the AI investment space [6] - Alphabet has invested approximately $3 billion in Anthropic, including $2 billion in 2023, and has secured a deal to supply Anthropic with AI chips starting in 2026, valued at tens of billions [7]