Microsoft logs $3.2B from Anthropic investment, but OpenAI was a mixed bag
Quick Answer
Microsoft reported a $3.2 billion gain from its Anthropic investment in Q4 FY2026, boosting EPS by 33 cents, while its OpenAI investment saw a $600 million write-down, reducing EPS by 7 cents.
Quick Take
Despite the mixed results, Microsoft's overall revenue for the quarter reached $90 billion with a net income of $35.8 billion.
Key Points
- Microsoft's Anthropic investment generated a $3.2 billion gain in Q4 FY2026.
- OpenAI investment was marked down by $600 million, affecting EPS negatively.
- Microsoft owns approximately 27% of OpenAI and reports quarterly on this investment.
- For FY2026, OpenAI investment yielded a $5 billion gain, adding 67 cents to EPS.
- Overall, Microsoft reported $90 billion in revenue and $35.8 billion in net income for the quarter.
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When Microsoft reported killer fourth-quarter earnings for its fiscal 2026 year (which ended June 30), it tucked in an interesting little tidbit about how its investments in the two biggest, and competing, AI labs are doing.
For the quarter, it recorded its investment in Anthropic as a $3.2 billion gain, boosting diluted earnings [er share by 33 cents. (Microsoft reported diluted earnings per share of $4.81 for the quarter). Microsoft invested $5 billion 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. It does, however, discuss its OpenAI investment quarterly. Microsoft said investment did not fare nearly as well in the quarter, and marked it down about $600 million, reducing diluted EPS by about 7 cents per share.
Microsoft owns about 27% of OpenAI. And while Microsoft also receives revenue-share payments, it doesn’t report how much OpenAI pays under that arrangement. Instead, Microsoft accounts for the value of its investment. While this quarter brought a pretty sizable decline in the value of that investment, the $600 million write-down was still mostly a rounding error for Microsoft. The company delivered a highly profitable quarter, reporting $90 billion of revenue and net income of $35.8 billion for the quarter. Microsoft’s revenue was $331.8 billion with a net income of $133.7 billion for the year.
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 on EPS, respectively, the company reported. (Microsoft reported $17.95 EPS for its fiscal year.) Still, it is noteworthy that Microsoft reported nearly as much of a gain on Anthropic in one quarter as it did for the year on OpenAI for the entire year. In fact, it is so noteworthy that Microsoft disclosed it.
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