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Meta Uses Tax Credits for AI Data Centers
Developing
In Short: Meta has been using a controversial technique to claim billions in tax credits for its AI data centers, according to a report.
Meta has been using a controversial technique to claim billions in tax credits for its AI data centers, according to a report by Gizmodo.
The tech giant has been classifying its AI data centers as experimental 'pilot models' when filing taxes, allowing it to claim substantial tax credits.
Meta has spent billions of dollars on its artificial intelligence turnaround effort, which includes operating 28 data centers nationwide.
The company buys specialized chips from Nvidia for these data centers, which it uses in its AI operations.
However, the Times notes that Meta’s own accountants are reportedly concerned that the classification of these data centers as experimental could be challenged by the IRS.
In Pennsylvania, Meta has reportedly offered locals cash to stop protesting a new data center.
The technique Meta uses to claim tax credits is under scrutiny, with some questioning whether taxpayers are effectively subsidizing the company’s AI data center expansion.
What this adds
Meta's strategy of classifying AI data centers as experimental 'pilot models' is a new development in the use of tax credits for technology investments.
Background
California lawmakers have approved measures requiring data center developers to disclose water use and cover infrastructure costs, amid growing opposition and environmental concerns.
What's still developing
- Thanks to the method, the NYT reports that Meta has claimed billions of dollars in tax credits over the past two years, becoming the biggest publicly traded beneficiary of the tax credit.
- But the Times also notes that Meta’s own accountants are allegedly worried that the classification exists in a very gray area and that the IRS could decide to overturn the savings.