# Meta informs IRS that data centers are experimental and may fail > Source: > Published: 2026-09-30 09:09:31+00:00 Meta official logo (public domain, Wikimedia Commons) — CryptoBriefing brand treatment # Meta informs IRS that data centers are experimental and may fail The tech giant's creative tax classification of its massive AI infrastructure helped slash its federal tax bill by billions, drawing scrutiny from lawmakers and the IRS alike. [Meta](https://cryptobriefing.com/markets/meta/) is telling the IRS that its multi-billion-dollar data centers, the backbone of its AI ambitions, are essentially science experiments that might not work out. The classification matters enormously, because under new US tax law, experimental expenditures can be written off immediately rather than amortized over years. The result: Meta’s federal tax expense plummeted from $9.6 billion in 2024 to $2.8 billion in 2025. That’s a 71% drop in a single year, even as the company poured roughly $72 billion into capital expenditures, the vast majority of which went toward data center construction and AI infrastructure. ## The tax law that made it possible The mechanism behind this maneuver is the One Big Beautiful Bill Act, signed into law in 2025. Among its many provisions, the OBBBA reinstated immediate expensing for domestic research and experimental expenditures under a new section of the tax code, IRC Section 174A. Before this legislation, companies had to amortize their R&E spending over five years for domestic costs and 15 years for foreign ones, a change introduced in 2022 that the tech industry had lobbied aggressively against. The OBBBA effectively reversed that by letting companies deduct qualifying expenses in the year they’re incurred. ## The Hyperion project and the scale of the bet The company’s Hyperion data center campus in Richland Parish, Louisiana, is designed to reach 5 gigawatts of computational capacity. The total planned investment exceeds $50 billion for this single project. Meta has structured the financing through joint ventures and arrangements designed to limit its long-term financial exposure. ### AI, tech, and the markets they move—in one daily briefing. Daily. Free. Join 34,000+ readers across crypto, finance, and policy. The Union of Concerned Scientists has flagged a concern about that framing: if Meta’s data centers are genuinely at risk of failure or obsolescence, local utility customers could end up bearing stranded asset costs, paying for infrastructure built to serve facilities that no longer need it. ## Lawmakers take notice Senator Elizabeth Warren, along with other legislators, sent letters to Meta on September 27-28, 2026, asking pointed questions about the company’s use of R&E deductions for its data center investments. Meta is already locked in a significant dispute with the IRS over its international tax structures and transfer pricing, particularly around intellectual property and foreign earnings. Those Tax Court cases involve billions of dollars in alleged adjustments. The data center classification adds another front to what’s becoming a sprawling tax conflict between one of the world’s largest companies and the federal government. For Meta’s stock specifically, investors face a dual-edged situation. The tax savings are real and material, adding billions to the bottom line. But they depend on a legal interpretation that hasn’t been tested in court and faces growing political headwinds. A $6.8 billion swing in annual federal tax expense is the kind of variable that makes quarterly earnings calls interesting. **Disclosure:** This article was edited by Diego Almada Lopez. For more information on how we create and review content, see our [Editorial Policy](https://cryptobriefing.com/editorial-policy/).