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Meta cut billions from tax bill by classifying AI data centers as experiments, report says

Meta cut billions from tax bill by classifying AI data centers as experiments, report says
— Foto: Anadolu Agency

The company reportedly used a federal research tax credit for its artificial intelligence data centers, reducing its 2025 tax bill by nearly $4 billion.

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US technology company “Meta” used a federal research tax credit to shield billions of dollars from corporate taxes by classifying its artificial intelligence data centers as experimental pilot models, The New York Times reported on Tuesday.

According to the newspaper, “Meta” told the Internal Revenue Service that its AI data centers represented a “giant experiment that could fail.” The report cited four people familiar with the company’s operations.

The approach reduced “Meta”’s 2025 tax bill by nearly $4 billion, making the company the largest beneficiary of the credit among publicly traded firms, according to IRS filings.

How the tax strategy works

The strategy is based on a provision introduced in the 1980s to encourage innovation. It allows companies to claim tax credits for supplies used in research rather than in standard business operations.

People familiar with the matter said “Meta” began classifying commercially proven processors, including chips purchased from “Nvidia”, as experimental supplies when they were deployed at artificial intelligence facilities.

Meta defends the practice

“Meta” defended its use of the tax credit, saying it had invested $200 billion in research over five years, including $57 billion last year.

“Like other companies that invest at this scale, we use the tax incentives Congress established decades ago to encourage this type of domestic investment,” the company said.

This article was processed automatically and checked by the editorial team.

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