When Microsoft announced its robust fourth-quarter earnings for fiscal year 2026, which concluded on June 30, the report included an intriguing detail regarding the performance of its strategic investments in two major, yet rival, artificial intelligence laboratories.
During the quarter, Microsoft recognized a substantial $3.2 billion gain from its investment in Anthropic, which contributed significantly by increasing diluted earnings per share by 33 cents. This figure is particularly notable given Microsoft's reported diluted earnings per share of $4.81 for the quarter. The initial $5 billion investment in Anthropic was made in November 2025, structured as a reciprocal agreement where Anthropic committed to purchasing $30 billion in Azure cloud services.
Unlike its quarterly reporting on OpenAI, Microsoft typically does not provide regular updates on the valuation of its Anthropic investment. However, the company did disclose that its OpenAI investment experienced a less favorable quarter, resulting in an approximate $600 million markdown. This adjustment consequently reduced diluted earnings per share by about 7 cents.
Microsoft holds approximately 27% ownership in OpenAI and, while it benefits from revenue-share payments, the specific amounts under this arrangement are not publicly reported. Instead, Microsoft primarily accounts for the fluctuating value of its investment. Despite the notable $600 million decline in investment value this quarter, it represented a relatively minor adjustment for Microsoft, which otherwise reported an exceptionally profitable period with $90 billion in revenue and $35.8 billion in net income for the quarter. For the full fiscal year, Microsoft achieved total revenues of $331.8 billion and a net income of $133.7 billion.
A broader perspective reveals that Microsoft's investment in OpenAI demonstrates a much stronger performance when evaluated on an annual basis.
For the entire fiscal year, Microsoft's OpenAI investment generated an impressive $5 billion gain, adding $0.67 to the company's full-year earnings per share, which stood at $17.95. It is particularly striking that the gain realized from Anthropic in a single quarter nearly equaled the full-year gain from OpenAI, a fact Microsoft deemed significant enough to explicitly disclose.
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