Big Tech profits are being inflated by stakes in private startups

Big Tech earnings are being materially boosted by rising valuations of stakes in private startups, a dynamic that could be inflating reported profits across the sector and the US Tech 100 index. Goldman Sachs notes hyperscalers saw an unusually large contribution from “other income” in Q1: Alphabet and Amazon together recorded $53 billion, nearly 60% of their income, and $49 billion of that was tied to equity stakes in private companies. Amazon holds roughly a 15–20% stake in Anthropic; Microsoft owns about 27% of OpenAI’s for‑profit arm after its 2025 restructuring. The piece warns investors to focus on operating profits as a cleaner measure of underlying performance in case private valuations prove unsustainable.