Big Tech's $160bn: Paper Gains, Real Confusion
According to the Financial Times, Big Tech's combined profits received a $160 billion boost not from selling products or expanding markets, but from paper gains on equity stakes in OpenAI, Anthropic, and SpaceX — private AI companies whose valuations have surged without a single public share price to anchor them to reality.
Big Tech's $160bn: Paper Gains, Real Confusion
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The numbers looked extraordinary until someone asked where they came from. According to the Financial Times, Big Tech's combined profits received a $160 billion boost not from selling products or expanding markets, but from paper gains on equity stakes in OpenAI, Anthropic, and SpaceX — private AI companies whose valuations have surged without a single public share price to anchor them to reality.
Analysts are now warning that these windfalls are distorting the tech sector's core earnings metrics in ways that make quarter-on-quarter comparisons almost meaningless. A company can report record profit while its actual operating business stagnates, so long as the private AI firm it backed two years ago keeps attracting new investors at higher valuations. The gain is real on paper. It is not cash. It does not pay engineers.
The detail that sharpens this: Microsoft, Google, and Amazon are simultaneously the infrastructure providers, the investors, and in some cases the largest customers of the very AI firms inflating their balance sheets. The circularity is structural, not accidental.
Regulators in Brussels have begun scrutinising exactly these cross-ownership arrangements. Markets are pricing in AI dominance. The earnings reports are confirming it. Neither exercise requires the underlying business to actually work.
The valuation holds until it doesn't.
