Meta shields billions in taxes by classifying AI data centers as experimental models: Report

US tech company Meta exploited 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 Tuesday.

Meta told the Internal Revenue Service that its AI data centers were a “giant experiment that could fail,” the newspaper reported, citing four people familiar with the company’s operations. The maneuver trimmed nearly $4 billion from Meta’s 2025 tax bill, making it the largest beneficiary among publicly traded companies, according to IRS filings.

The strategy relies on a provision dating to the 1980s that was intended to spur innovation by allowing tax credits for supplies used in research rather than standard business operations. People familiar with the matter said Meta began classifying commercially proven processors, including chips bought from Nvidia, as experimental supplies when they were used in artificial intelligence facilities.

Meta defended the practice, saying it 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.