Meta’s aggressive expansion of artificial intelligence is not only reshaping its technology business but also its tax strategy. According to an investigation by The New York Times, the company has classified some of its multibillion-dollar AI data centres as experimental projects to claim billions of dollars in US research tax credits.
The strategy has reportedly reduced tax bill of Mark Zuckerberg’s Meta but it has also raised questions among tax experts and within the company about whether the approach could withstand scrutiny from the Internal Revenue Service (IRS).
The NYT said it has based its report on a review of Meta’s securities filings and interviews with four people familiar with the company’s operations.
What is Meta claiming?
According to the NYT, Meta has treated large AI data centres as “pilot models” for tax purposes. Some employees in Meta’s finance department questioned whether the approach would withstand IRS scrutiny, according to NYT.
The credit was created in 1981 to encourage companies to invest in research, experimentation and technological innovation. Companies can claim credits for qualifying expenses when they are working to resolve technical uncertainties through experimentation.
Why is the strategy controversial?
The NYT reported that some Meta employees in the company’s finance department questioned whether the approach would satisfy IRS requirements.
The central issue is whether buying commercially available computer chips for large-scale AI infrastructure constitutes a research expense.
Tax experts cited by the NYT said the distinction is important. Andre Shevchuck, a partner at advisory firm BPM, described characterising Meta’s AI data centres as experimental as “kind of wild and out there”.
Another tax expert, Shawn Marchant of Tanner, told the NYT he would be skeptical of applying the credit to all the computer chips used across Meta’s data centres.
How much has Meta saved?
The tax strategy has produced substantial savings.
According to Meta’s filings cited by the NYT, the company’s research tax credit reduced its tax bill by about $700 million in 2023, before the AI data-centre strategy began.
That figure increased to $2 billion in 2024 and then $3.9 billion in 2025.
Meta disputes the suggestion that its tax position is improper. Company spokesman Andy Stone said Meta had invested $200 billion in R&D over five years, including $57 billion in the most recent year, and said the company was using tax incentives created by Congress to encourage domestic investment and innovation.
Meta itself acknowledges tax uncertainty
One significant aspect of the NYT report is that Meta’s own financial disclosures acknowledge uncertainty surrounding its research tax credits.
The company reports “unrecognized tax benefits” — amounts associated with tax positions that could potentially be challenged by authorities.
According to the NYT, the amount Meta has set aside for such tax uncertainties rose 45% to $18.74 billion, from $12.9 billion two years earlier.
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