Sen. Elizabeth Warren and Senate Democratic colleagues sent letters on September 28, 2026, to the CEOs of Amazon, Alphabet, Meta and Microsoft. The letters demand details on tax deductions tied to AI and data-center spending under the 2025 One Big Beautiful Bill Act, and companies have until October 11, 2026 to respond.
The central question is whether a law designed to encourage investment handed the biggest AI spenders an outsized tax advantage, and at whose expense.
The Numbers Behind the Inquiry
Company filings cited by lawmakers show tax expenses falling sharply as profits climbed.
According to the lawmakers’ review of SEC filings, Microsoft’s current federal income-tax expense fell by more than $11 billion between fiscal years 2025 and 2026. That decline came even as Microsoft’s pretax income rose by $42.3 billion over the same period.
Nearly $8 billion: that is how much Amazon’s federal income-tax payment fell between fiscal years 2024 and 2025, per the same review. Alphabet’s combined current federal and state income-tax expense declined by more than $7 billion over the same period.
Meta’s figures are the starkest. The company paid $2.8 billion in federal income tax in 2025, down from $9.6 billion in 2024, while its profit was described as roughly similar in both years.
A caveat applies here: current tax expense, cash tax payment and tax benefit are not identical measures. Accounting timing, credits and state-versus-federal treatment all affect the final number, and what a company reports on paper can differ from what it actually sends to the Treasury.
The Institute on Taxation and Economic Policy estimated that six major companies received an estimated combined $83 billion in federal tax benefits in 2025. That group includes Microsoft, Alphabet, Amazon, Meta, JPMorgan Chase and Nvidia. ITEP attributed $18.7 billion to Microsoft, $18.4 billion to Alphabet, $17.4 billion to Amazon and $13.7 billion to Meta.
How the Tax Provisions Work
Bonus depreciation lets companies write off qualifying hardware costs immediately rather than spreading deductions across years.
The One Big Beautiful Bill Act made 100% first-year bonus depreciation permanent for qualifying business investments. For AI companies, that means eligible data-center servers, networking hardware and related equipment may be fully deducted in the year such property is placed in service rather than depreciated over a longer schedule.
The 2025 law also restored immediate expensing for qualifying domestic research expenditures, with provisions that may cover eligible wages, hardware and cloud-server costs used in qualifying research. Eligibility depends on asset classification and documentation; not every data-center cost automatically qualifies, and the IRS has not determined that any of the four companies improperly claimed deductions.
Warren’s investigation is about transparency and scale, not alleged wrongdoing. These are established legal provisions under current tax law.
Warren’s office characterized the benefits as costs shifted onto households. In the senators’ framing, tax breaks of this magnitude reduce federal revenue while the government faces pressure to cut programs including Social Security and SNAP.
What Warren Is Asking and What Companies Said
The letters request specifics on deductions, credits and any lobbying conducted before the law passed.
The lawmakers asked each company to provide:
- The total deductions and credits claimed for AI development and data-center construction
- The amount of spending treated as immediately deductible under bonus depreciation
- Each company’s interpretation of research-credit eligibility
- Any lobbying or advocacy conducted before the 2025 law’s passage
- The resulting effect on federal tax liabilities
Microsoft declined to comment, according to CNBC. Amazon, Alphabet and Meta had not responded at the time of publication, per available reporting. Nonresponse is not evidence of wrongdoing.
The White House has defended the law’s business provisions as growth-oriented measures intended to increase investment, jobs and wages across industries and sectors.
The central dispute is whether accelerated deductions are an appropriate incentive for productive investment or a benefit that primarily rewards companies that would have built AI infrastructure regardless of the tax treatment. The 2026 midterms are sharpening the political stakes. The inquiry could feed congressional proposals to revise data-center depreciation rules or add new disclosure requirements.
