Microsoft's AI Investments: A Tale of Two Labs

When Microsoft reported its impressive fourth-quarter earnings for fiscal 2026, it revealed an interesting update on its investments in two prominent AI labs: Anthropic and OpenAI.

A $3.2 Billion Gain for Anthropic

For the quarter, Microsoft recorded a $3.2 billion gain from its investment in Anthropic, which boosted diluted earnings per share by 33 cents. This gain is a result of Microsoft's $5 billion investment in Anthropic in November 2025, as part of a circular agreement where the AI lab also agreed to purchase $30 billion worth of Azure services.

However, it's worth noting that Microsoft does not typically update the value of its Anthropic investment each quarter. Instead, it discusses its OpenAI investment quarterly.

A $600 Million Write-Down for OpenAI

Microsoft's investment in OpenAI did not fare as well in the quarter, with a $600 million write-down reducing diluted EPS by about 7 cents per share. As Microsoft owns approximately 27% of OpenAI, the company receives revenue-share payments, but it does not disclose the amount. Instead, Microsoft accounts for the value of its investment.

While this quarter brought a significant decline in the value of the OpenAI investment, the $600 million write-down was still a relatively small dent in Microsoft's overall finances. The company delivered a highly profitable quarter, with $90 billion in revenue and net income of $35.8 billion for the quarter.

A More Promising Picture for OpenAI on a Full-Year Basis

When viewed on a full-year basis, Microsoft's OpenAI investment looks much more promising. For the year, the investment generated a $5 billion gain and added $0.67 to EPS, respectively. This is a notable contrast to the $3.2 billion gain recorded by Anthropic in just one quarter.

Overall, Microsoft's AI investments continue to be an area of interest for the company, with both Anthropic and OpenAI showing promise in different ways.