Big tech’s 2025 tax returns just got a lot lighter, thanks to a surge in AI data‑center construction and a new wave of business‑friendly tax provisions rolled out by lawmakers last year.
Those new rules cut depreciation, research and development, and capital‑investment costs, allowing the sector to shift huge amounts of money into tax‑advantaged pockets.
Amazon’s federal tax bill leapt from roughly $9 billion in 2024 to a modest $1.2 billion in 2025. Meta followed suit, falling from about $9.6 billion to $2.8 billion. Alphabet’s combined federal and state taxes dropped from around $21.1 billion to $13.8 billion.
While the bills shrank, profits are climbing. Amazon’s domestic earnings swelled to nearly $90 billion in 2025, a jump of more than 40% from the previous year. Alphabet’s domestic profits climbed 32% to $143.6 billion, and Meta’s topped $79.6 billion, up 20% year‑over‑year.
Amazon said it’s simply following the new rules, noting that it poured more than $340 billion into AI and related investments across the United States last year. The company also highlighted that many of the tax savings are deferred and will eventually be paid, but it stresses the policy doesn’t change the overall tax amount it owes.
Meta’s chief financial officer, Susan Li, added that the company is reaping “substantial cash tax savings” from the updated laws, thanks to its significant spend on infrastructure and R&D.
The core of the windfall lies in a series of deductions that were signed into law by the previous administration: 100% expensing for new factories, accelerated depreciation on property, and credits for capital investments, factory construction, interest expenses, and research and development.
Deferred taxes are a big part of the picture. Amazon reported over $11 billion in deferred amounts for 2025, Meta’s topped $18 billion, and Alphabet’s deferred federal and state taxes were about $8 billion.
Because of those deferrals, the actual payments companies will make this year exceed the 2025 tax bills. Amazon’s total payments, for example, come to $2.75 billion once prior‑year deferrals are accounted for.
Critics point to the Institute on Taxation and Economic Policy, which argues that these giants avoided nearly $50 billion in taxes compared with the statutory 21% rate. The group’s analysis also notes that Tesla, for instance, paid no federal taxes at all in 2025.
Some observers have highlighted the irony that the CEOs of all four companies attended the former president’s inauguration last year, while now they face scrutiny over their tax strategies.
