Meta dodges billions in US taxes by calling its AI data centers experiments
Meta saved $3.9 billion in 2025 by treating AI data centers as experimental pilot models.
The New York Times reports Meta saved $3.9 billion in 2025, up from $2 billion the prior year and $700 million in 2023, by claiming the federal research tax credit for AI data centers labeled "pilot models" and Nvidia chips treated as experimental materials. That contrasts with Mark Zuckerberg's publicly described multi-gigawatt Prometheus and Hyperion clusters and hundreds of billions in planned compute. SEC filings warn the position may be challenged, and reserves for uncertain tax positions rose 45% to $18.74 billion. Auditor EY approved the strategy and is reportedly offering it to other companies buying AI chips.
- Research-credit savings climbed from $700 million in 2023 to $3.9 billion in 2025.
- Prometheus and planned 5-gigawatt Hyperion are still booked as pilot models.
- Uncertain tax position reserves rose 45 percent to $18.74 billion.
- Auditor EY designed the approach and is pitching it to other chip buyers.
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Meta is using a federal research tax credit to save billions by classifying its AI data centers as "pilot models" and Nvidia chips as experimental materials.
The company saved $3.9 billion in 2025, up from $2 billion the year before and $700 million in 2023, making it the biggest beneficiary of this credit among all publicly traded companies, the New York Times reports.
The "pilot model" label is hard to square with what Meta tells investors and the public. In July 2025, Zuckerberg announced plans to "invest hundreds of billions of dollars into compute to build superintelligence," anchored by several multi-gigawatt clusters. The first, Prometheus, is already partly online, and a second, Hyperion, is supposed to scale to 5 GW over several years. "We have the capital from our business to do this," Zuckerberg wrote last summer.
By June 2026, Meta was openly detailing its massive compute infrastructure, including partnerships with Nvidia, AMD, AWS, Arm, and Broadcom, alongside its own custom MTIA chips. None of this sounds like an experiment. Zuckerberg himself said in January 2025 that these data centers would "drive our core products and business."
The tax credit dates back to a 1981 law. James Shannon, the congressman who introduced it, told the NYT it was meant for "people power, knowledge, information," and Meta's use has "gone way, way beyond what anybody could have imagined."
Meta defends the practice by pointing to $200 billion spent on R&D over the past five years. But even Meta's own accountants see the strategy as legally risky. In SEC filings, the company warns the savings could be challenged, and reserves for uncertain tax positions jumped 45 percent to $18.74 billion. Even if the IRS claws back the money, Meta likely still comes out ahead because the capital was put to work in the meantime, boosting its stock price.
EY, Meta's auditor, approved the strategy. The firm also helped Meta set up the tax credit scheme in the first place and is now pitching the same approach to other companies looking to offset their AI chip purchases, the Times reports.
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