Profits of the largest companies grows by $160 billion due to investments in AI firms

Alphabet, Amazon, Nvidia, and Microsoft announced a notable rise in pre-tax profits in their reports, fueled by the "other income" category. This was mainly because of the reevaluation of investments in other firms, instead of launching new business divisions or enhanced actual cash flow.

Per accounting standards, businesses are required to record fluctuations in the value of their investments at the conclusion of every quarter. Revaluation for private companies takes place solely after funding rounds.

During the last quarter, the revaluation was influenced by Elon Musk's SpaceX IPO, which raised around $86 billion in June, marking the largest IPO ever. Anthropic and OpenAI are both expected to go public shortly. Anthropic may launch its IPO by October, and it's anticipated to be larger than SpaceX's.

source: ft.com