Amazon, Meta (formerly Facebook’s parent company) and Alphabet (Google’s parent company) have reported significantly lower tax bills, driven by heavy investments in artificial intelligence (AI) and recent changes to U.S. tax policy that favour technology firms.
According to corporate filings and analyst commentary, all three companies showed sharp reductions in their effective tax rates for the most recent reporting period. While detailed figures have not been disclosed publicly, industry observers say that the combination of large AI-related capital expenditures and revised tax rules in Washington significantly cut their tax liabilities compared with previous years.
The reduced tax burden stems from several factors:
• AI investment incentives: New tax provisions encourage major investments in AI research and infrastructure, allowing companies to claim larger deductions or credits for qualifying expenditures. These are designed to spur innovation and technological leadership, but critics say they disproportionately benefit already very profitable tech giants.
• Expensing rules and accelerated depreciation: U.S. tax law changes allow technology firms to immediately expense certain capital investments, such as data centres, specialised AI hardware and server farms, rather than spreading those costs over many years. This reduces taxable income in the short term.
More Read
• Tax credits for innovation: Enhanced or newly introduced tax credits for research and development (R&D), including AI work, further lower tax bills for firms reporting large R&D spending.
Experts say these tax outcomes reflect broader policy trends aimed at maintaining U.S. competitiveness in AI and advanced technologies, but they also raise concerns about tax fairness and the erosion of the corporate tax base.
Critics argue that while such incentives help position American companies at the forefront of technological innovation, they can also allow highly profitable companies to pay relatively little in taxes compared with their earnings. Some policymakers have called for revisiting the structure of AI-related tax incentives to ensure that benefits are more broadly shared and that the corporate tax system remains sustainable.
More Read
Defenders of the incentives counter that the tax breaks help accelerate private investment in critical technologies, create jobs, and help the United States maintain its leadership position in AI, a sector widely seen as a key driver of future economic growth.
As discussions over tax policy continue in Washington, Big Tech’s falling tax bills are likely to attract increased scrutiny from lawmakers, economists and the public alike, even as these firms reinvest in AI platforms, cloud services, and emerging technologies.
Ghanaian tech specialist Abena Adoma champions community-driven digital innovation
