Microsoft’s AI Investments: A Tale of Two Companies
When Microsoft reported its killer fourth-quarter earnings for its fiscal 2026 year, which ended on June 30, it revealed some interesting details about its investments in two of the biggest AI labs in the industry.
For the quarter, Microsoft recorded its investment in Anthropic as a $3.2 billion gain, which boosted diluted earnings per share by 33 cents. This gain was a result of Microsoft’s $5 billion investment in Anthropic in November 2025 as part of a circular agreement under which the AI lab also agreed to buy $30 billion worth of Azure services.
Microsoft does not routinely update the value of its Anthropic investment each quarter, but it does discuss its OpenAI investment quarterly. In this quarter, Microsoft said its OpenAI investment did not fare as well and was marked down by about $600 million, reducing diluted EPS by about 7 cents per share.
Microsoft owns about 27% of OpenAI and receives revenue-share payments, but the company does not report how much OpenAI pays under this arrangement. Instead, Microsoft accounts for the value of its investment, which saw a significant decline in this quarter.
Despite this decline, Microsoft’s OpenAI investment looks much better when viewed on a full-year basis. For the year, Microsoft’s OpenAI investment generated a $5 billion gain and added $0.67 to EPS, respectively, the company reported.
It is worth noting that Microsoft reported nearly as much of a gain on Anthropic in one quarter as it did for the year on OpenAI. This highlights the significant difference in performance between the two investments.
Microsoft’s overall performance was highly profitable, with the company delivering a net income of $35.8 billion for the quarter and $133.7 billion for the year.
Microsoft’s revenue was $90 billion for the quarter and $331.8 billion for the year, making it one of the most successful companies in the industry.
The company’s success can be attributed to its strategic investments in AI and cloud computing, which have paid off significantly.
A Closer Look at Anthropic and OpenAI
Anthropic is an AI lab that has been making waves in the industry with its cutting-edge technology and innovative approaches to AI development. Microsoft’s investment in the company has paid off significantly, with a $3.2 billion gain in just one quarter.
OpenAI, on the other hand, has been a mixed bag for Microsoft. While the company owns a significant stake in OpenAI and receives revenue-share payments, the value of its investment has declined significantly in this quarter.
Despite this decline, OpenAI remains a significant player in the industry, and Microsoft’s investment in the company is likely to continue to pay off in the long term.
