MW Google is now a glorified venture-capital fund thanks to its SpaceX and Anthropic stakes
By Britney Nguyen
Google's early investments in SpaceX and Anthropic look like some of the 'most successful venture bets any public company has ever made,' one expert says
Paper gains from Google's Anthropic and SpaceX stakes were major contributors to the company's growth in net income.
Google's first-quarter earnings report reflected its position as an artificial-intelligence winner - and as a savvy investor.
The tech giant $(GOOGL)$ $(GOOG)$ reported net income of $62.6 billion for the March quarter, up about 81% from a year ago. More than half of that - $36.9 billion - came from unrealized gains on equity positions. And of those, SpaceX and Anthropic were likely the overwhelming contributors.
SpaceX and Anthropic are both reportedly heading for initial public offerings as soon as this year, and their private-market values have surged in the lead-up to those potential deals. The company's high-profile investments in these AI startups are separate from GV, an actual venture-capital entity that's affiliated with Alphabet but run independently of the company.
While SpaceX's most recent valuation has passed the trillion-dollar mark, according to PitchBook, the company is reportedly planning a fresh round that could send its valuation to $2 trillion. That would make it one of the most valuable companies in the U.S. by market capitalization on debut. Meanwhile, Anthropic is currently valued at $380 billion, though Bloomberg reported it is looking at a raise that could bump that number to $900 billion.
SpaceX and Anthropic didn't respond to MarketWatch's requests for comment.
Should both companies go public, Google will have made some of the "most successful venture bets any public company has ever made," David Bader, a data-science professor at the New Jersey Institute of Technology, told MarketWatch.
Granted, Google's gains related to the skyrocketing AI startup valuations are only on paper. The company would have to sell its positions to turn them into actual cash. But despite the accounting treatment of it all, Bader sees Alphabet's stakes as "real value."
Google invested $1 billion into Elon Musk's space startup with financial-services firm Fidelity in 2015, and at the time, the 10% ownership stake was estimated to be worth $10 billion.
Now Google's SpaceX stake stands at about 6.1%, according to a report that the company filed with Alaska's Commerce Department a few weeks ago. That means that if SpaceX were to command a $2 trillion valuation, Google's stake in SpaceX might be worth about $122 billion, though it remains to be seen if the stake is further diluted by new share issuance.
See more: Google's stake in SpaceX could be worth more than most companies on the planet
Meanwhile, Google confirmed late last month that it would invest up to $40 billion into Anthropic. Under the deal, which Bloomberg had first reported, Google plans to invest $10 billion at the company's current $380 billion valuation, while the remaining $30 billion would be contingent on Anthropic reaching certain performance milestones.
Before that, Google had poured more than $3 billion into the OpenAI rival since 2023. The tech giant has a 14% stake in Anthropic that cannot surpass 15%, the New York Times reported last year, citing filings it had obtained.
"They really made smart investments in companies that have a deep meaning for Google," Bader said.
For one, Anthropic is a major customer of Google's custom chips, which are emerging as a revenue driver for the tech giant. In April, Anthropic said it had inked a new deal with Google and Broadcom $(AVGO)$ "for multiple gigawatts of" tensor processing units that are expected to come online next year. Google and Broadcom have co-developed the chips for more than a decade.
Amazon.com (AMZN) has also invested billions into Anthropic, and the AI startup uses its Trainium chips to train and power its Claude models. Last month, Amazon expanded its investment by $5 billion and said it plans to invest another $20 billion in the future.
In the first quarter, Amazon's net income rose 77% from the previous year to $30.3 billion. That included pre-tax gains of $16.8 billion in non-operating income tied to its investments in Anthropic, the company said.
Read on: Google debuts two custom chips in latest bid to challenge Nvidia's dominance
Meanwhile, SpaceX's focus on putting data centers in space could benefit Google in the future as agentic AI and the next era of physical AI continue to drive demand for massive amounts of compute. The investment in SpaceX also gives the tech giant a foothold in satellite internet, Bader said.
"When SpaceX has its IPO, Google would likely hold on to its share, which is much more valuable than a huge cash payout," he said.
Getting in early with SpaceX and Anthropic "is a rare accomplishment," Michael Ewens, a finance professor at Columbia Business School, told MarketWatch.
Google's income statement reflects how valuable SpaceX and Anthropic are getting, Ewens said. The companies might not see such extreme increases in their valuations once they go public.
Still, the relationships will remain strategically valuable for Google. For one, Anthropic's use of TPUs could attract more chip customers for Google, Ewens said. And if SpaceX eventually does put data centers into space, Google could lead the queue of customers looking to use them.
While Anthropic or SpaceX could become volatile stocks once public, Ewens said he doesn't see much financial risk for Google since the company has massive earnings from operational parts of its business. But there are strategic risks.
For example, if Anthropic is unable to successfully utilize Google's TPUs down the line, that would be a bad sign for the product, he said.
If SpaceX and Anthropic do become publicly traded companies, Bader said Google's profit numbers could be volatile as they'd reflect the accounting treatment of stock prices, not the underlying health of Google's business.
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-Britney Nguyen
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May 02, 2026 09:31 ET (13:31 GMT)
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