The New York Times reported that Meta Platforms is classifying its extensive, costly AI data center projects as “pilot models” to claim a tax credit dating to the Reagan era. The strategy relies on a potentially dubious interpretation of the tax code.
It reportedly saved Meta nearly $4 billion in fiscal 2025. That made the company the largest known beneficiary of this specific credit.
The move comes amid public backlash over the environmental impact of the facilities. The Internal Revenue Service has a history of challenging companies over the alleged abuse of research-related tax credits.
The IRS is also still disputing Meta’s use of a different tax loophole from 2013. That dispute highlights the potential financial risks if the agency challenges Meta’s current tax strategy.