Sen. Elizabeth Warren sent letters to Mark Zuckerberg, Sundar Pichai, Andy Jassy, and Satya Nadella asking whether they're benefiting from GOP-backed tax subsidies for AI data centers. The answer is yes. That's what subsidies do. They subsidize things.
Warren wants to know if Meta, Google, Amazon, and Microsoft are using state and local tax breaks to build the server farms that power their AI models. This is like asking a dog if it enjoys eating food off the floor. The dog does not feel conflicted about this arrangement.
The GOP legislation in question lets states offer tax incentives for data center construction. Tech companies accepted these incentives. Shocking behavior from corporations that employ tax attorneys by the shipping container.
Warren's concern appears to be that taxpayers are subsidizing profitable companies that don't need subsidies. Correct. They don't need them. They take them anyway because the alternative is leaving money on the table, which violates every principle of corporate finance and also basic common sense.
The letters ask for detailed responses about which subsidies each company has received, how much they've saved, and whether these savings went toward executive compensation or stock buybacks. The answers will arrive in six weeks written by compliance lawyers who bill $800 an hour to say nothing in twelve-page PDFs.
Meanwhile your brother-in-law Todd just bought Microsoft shares because he heard AI is the future. Todd thinks Warren's investigation might tank the stock. Todd does not understand that senators send letters every day and nothing happens. Todd will panic-sell at a loss when Nadella's non-answer gets published and CNBC calls it a "fiery exchange."
The subsidy question matters for infrastructure policy and regional economic development. It does not matter for your portfolio. Warren could get every dollar returned tomorrow and Microsoft would still print money like a government with worse oversight.
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