10. Strategic Investments

We hold strategic investments in privately held companies with a carrying value of $221.2 million and $262.7 million as of June 30, 2022 and December 31, 2021, respectively, which consist primarily of equity securities, and to a lesser extent, debt securities. These strategic investments are primarily recorded at fair value on a non-recurring basis. The estimation of fair value for these privately held strategic investments requires the use of significant unobservable inputs, such as the issuance of new equity by the company, and as a result, we deem these assets as Level 3 financial instruments within the fair value measurement framework.

We recognized unrealized gains on investments in privately held companies of $6.4 million and $19.7 million for the three and six months ended June 30, 2022, respectively, and $45.9 million of realized gains for the three and six months ended June 30, 2022. We recognized unrealized gains on investments in privately held companies of $52.1 million and $75.4 million for the three and six months ended June 30, 2021, respectively, and $27.8 million of realized gains for the three and six months ended June 30, 2021.

In the second quarter of 2022, we reclassified a publicly traded strategic investment to marketable securities. See Note 11 for further information. The carrying value of this publicly traded company was $16.2 million as of June 30, 2022. We recognized unrealized losses on this investment of $25.9 million for the three months ended June 30, 2022. The realized gains on this investment for the three months ended June 30, 2022 were not material.

Unrealized and realized gains on all strategic investments are included within other income (expense), net on the consolidated statements of operations and included as an adjustment to reconcile net loss to net cash provided by (used in) operating activities in our consolidated statements of cash flows. Strategic investments are included within other assets on the consolidated balance sheets.

All strategic investments are reviewed periodically for impairment. Impairment expense recorded for the three and six months ended June 30, 2022 and 2021, respectively, was not material.