Meta Uses Data Centers to Avoid Billions in Taxes & Ken Griffin Makes Biggest College Donation in History

0:00Good morning Brew Daily Show. I'm Neal Freyman. And I'm Toby Howell. Today, how Meta uses data centers to avoid billions in taxes.

0:08Neal Freyman:Then Ken Griffin just made the single largest donation to a college in U.S. history. It's Thursday, October 1st. Let's ride.

0:22Thank you so much to everyone who voted for us in the Signal Awards Best Business Podcast category. Thanks to you, we vaulted to the lead and hope to never look back. Speaking of fan votes, Fat Bear Week has wrapped up, and the winner with more than 100 ,000 votes was the enormous Backpack, who eked out a victory over Bear 910 with a little over 50 % of the poll. Now, Toby, Backpack has a very interesting backstory. is their little fat bear nepotism at play.

0:50Neal Freyman:There is. You can't fault Backpack for winning. He's the son of a former fat bear champion, Holly, so it runs in his blood. His name has a very cute origin story, too. He used to climb on his mom's back when he was little as she swam, hence the name Backpack. A worthy champion. Another great year. I'm still not over my boy Chunk, though, who won last year at an estimated weight of 1 ,200 pounds. got eliminated in the first round of this year. I feel like people were just looking for a different narrative and Backpack was the one that took up the mantle. And now a word from our sponsor, Roku Ads Manager.

1:27Neal Freyman:Neil, a$5 ,000 reward sounds pretty nice, wouldn't you say? I think it depends on what it's a reward for. If$5 ,000 is my reward for eating some weird bug, I'm in. But if it's for getting a misspelled tattoo, I'd probably pass. Oddly specific. But the$5 ,000 I'm talking about is for advertisers. Right now, they can get a$5 ,000 match on their first spend on Roku Ads Manager. Roku is the top smart TV operating system in the US with 100 ad-supported streaming channels, so I'd say that$5 ,000 is a worthwhile reward. To cash in on the offer, use code BREW5K at advertising.roku.com slash MBD. That's code BREW5K at advertising.roku.com slash MBD.

2:14Neal Freyman:Not since the trade of star safety Minka Fitzpatrick has a Pittsburgh to Miami move made this many waves. Ken Griffin, the founder of Citadel, is donating$3 billion to Carnegie Mellon University to help fund a new expansion campus in the Sunshine State. The$3 billion is the single largest gift ever donated to a U.S. university and serves as a further example of how all-in on Miami Griffin is. The Florida native founded Citadel, the market maker and trading firm in his Harvard dorm room, before eventually headquartering the firm in Chicago. But in 2022, following COVID, he moved Citadel's HQ to Miami and is now trying to beef up South Florida's educational infrastructure, earmarking$2 billion of the gift to build out an entirely new satellite campus that will serve about 3 ,500 students.

3:01Neal Freyman:Though the gift is philanthropic in nature, Citadel will benefit. The firm has recruited heavily from Carnegie Mellon in the past, so the new campus acts as a talent pipeline in its backyard. Griffin has reason to be optimistic that a University of Carnegie Mellon's level can help spur a transformation for Miami because it's worked for Pittsburgh, who has gone from a declining steel town to a major tech hub thanks to Carnegie Mellon's presence there. Neil, a big gift and an even bigger bet that Miami can metamorphosize into a high tech and high finance butterfly. Yeah, despite all of the hype over the past few years, Miami still has that reputation as being a place for billionaires, second homes, and just a transient workforce where maybe people go there when maybe they're a little younger and they leave for other cities because they're just better job opportunities.

3:49I'm reminded of the succession line. You know, I love you, but you're not serious people. With this$2 billion gift and putting Carnegie Mellon in Miami in Wynwood, which is this arts district, pretty cool place, that, you know, Ken Griffin is trying to create a more sustainable job pipeline with a lot of smart younger grads going to Miami for college and then working and staying in Miami. He said, I believe that all great American cities are anchored by great universities and Carnegie Mellon will bring a great university here to Miami, complimentary to other universities here in the region. There is Miami there, there's FIU, but something with the stature of Carnegie Mellon and the ability of Carnegie Mellon to generate startups and generate really smart people in AI and robotics and the industries of the 21st century thinks this will be a game changer.

4:36Neal Freyman:A lot of people too drew a parallel back to the founding of Carnegie Mellon originally by Andrew Carnegie, who donated$1 million in 1900 to establish what became CMU in Pittsburgh. His vision was this practical institution where working class people could learn skills that helped them improve their lives. Back then, it was like how to industrialize. Now we're in the AI age, so a lot of the same kind of principles are being applied to more modern technology. So that was a nice little parallel there. One of the biggest winners of this, by the way, is Moish Mana. He is the guy who sold the land for the Wynwood campus to Ken Griffin for over$1 billion.

5:18Neal Freyman:People within the industry says it probably represents the most extraordinary exit on the land assemblage ever in the commercial real estate industry. According to the ex-user Hittin Samanti, who runs a CRE newsletter. Manos started assembling those properties back in 2009 and all in paid about $70 million for it. Now he's selling it for 1.1 billion. That is pretty wild that he kind of foresaw that Miami might become this, or maybe he didn't. He just thought it was a good deal at the time, but that is quite the pretty penny. Meanwhile, if you go to Miami, it's basically just Ken Griffin everywhere.

5:52He's putting this imprint on this particular city after moving from Chicago a few years ago. He's given more than$2.4 billion in donations to South Florida and has slapped his name on literally every medical or academic building. There's the Kenneth C. Griffin Center at a neuroscience institute. There's the Kenneth C. Griffin Gallery at the Perez Art Museum. There's the Kenneth C. Griffin Cancer Research Building at the University of Miami. There's the Kenneth C. Griffin Urban Trail where you can walk or bike on this particular trail. And now there's going to be this Carnegie Mellon Campus. He grew up in Boca, lived in, went to Harvard, lived in Chicago, and now he's absolutely turning Miami into his own image.

6:33Neal Freyman:There's a little bit of a arms race happening within Florida's education system, though, because Stephen Ross, who's a developer and also the owner of the Miami Dolphins, he recruited Vanderbilt University to West Palm Beach. So now you have Carnegie Mellon and Vanderbilt within, you know, a couple hundred miles of each other. It's just a completely different sort of educational system we're in right now where these satellite campuses are becoming viable ways for cities to leave their mark, but also for universities to spread their brand far and wide all the way down to South Florida. And we should mention that this is not a conventional university or college, the Carnegie Mellon campus.

7:10There is going to be four challenge areas that they focus on, including things like climate and robotics and things like that. It's not going to be, oh, I'm going to go get a regular degree here. This is the university of the future. We saw Andreessen Horwitz, the VC firm, do this two-year program that will get people prepped for the AI future. It looks like something that Ken Griffin is doing here is not particularly that radical, but it's in that direction of saying, you're gonna go here to learn technical skills to get a job in this AI world going forward. Okay, moving on. I'm gonna need the lawyers at Meta to start doing my taxes.

7:45A new report from the New York Times reveals that Mark Zuckerberg's company is saving billions of dollars on its tax bill per year by questionably claiming its AI data centers are one giant experiment potentially doomed to fail. The move has reportedly caused some anxiety within Meta's own finance department because there's a decent chance the IRS decides to crack down. Essentially, there's this tax credit established early in the Reagan era called the Research and Experimentation Tax Credit designed to encourage companies to take bold technological risks that might not pan out. About two years ago, according to the Times, Meta started claiming the chips that power its data centers under the research credit, implying that these massive structures were just one big test, despite them being proven reliable projects.

8:27The idea is to ask forgiveness rather than permission, or in other words, move fast and break things. And the strategy has been incredibly lucrative. Because of the tax credit, Meta saved$3.9 billion off its bill in 2025, and$2 billion the year before that. Meta's response? Everything it's doing is above board. Spokesman Andy Stone said over the last five years, Meta invested$200 billion into R &D, $57 billion the last year alone, advancing frontier research, building new technology, and supporting American jobs. Like other companies that invest at this scale, we use the tax incentives Congress established decades ago to encourage this type of domestic investment.

9:04The question is, how long can Meta run this scheme until the feds start knocking?

9:08Neal Freyman:There's essentially two narratives that Meta has to give to two separate groups about its AI build-out. Two investors, they have to say, oh, AI is this sure bet. It's absolutely going to have returns for us. AI is working. It's in the core of everything we do. And then for tax purposes, they have to say, whoa, these are really experimental projects. We don't know if it's going to pan out. We are doing unresolved technical architecture here. We need to expense these as a research tax credit. So it's very interesting to see the bifurcation of what they are doing here. They're not the only company to claim this tax credit.

9:46Neal Freyman:Let's be clear on that. Apple, Amazon, Alphabet, Microsoft, every one of those companies reports more than$1 billion annually in its research credits. But what they are doing is applying it a little bit further than anyone has before, specifically to the hardware going into these data centers, because typically this tax is applied to the researchers and their salaries because they want to incentivize things that may not be commercially viable. But the hardware portion is where it gets a little bit of a gray area. But you can see why Meta's lawyers came up with this, because data centers are extremely expensive.

10:20They're spending hundreds of billions of dollars every year. And if you can shave a couple of Billy off of that, you know, it helps. Meanwhile, Meta stock just wrapped up its best month since 2022. This company's on an absolute tear right now. It jumped 27 % from the first of August or the first of September to the end. Investors are super hype about Muse and the fact that it might actually return, see a return on all these hundreds of billions of dollars of AI investments that is taking place. So Meta, I guess we're not doing stock of the week till tomorrow, but we can maybe give it an honorary stock of the week for having a 27 % jump over the course of September.

11:01Neal Freyman:Let's move on. Next time you ask your couple friend how they met and they start being a little cagey, it might not be because they met on the apps, but because the government set them up. Singapore just launched First Date, a government-built dating platform for public sector workers aged 21 to 35. The reason the government is stepping in to play Cupid is no one is having kids. Fewer than 30 ,000 babies were born last year, while Singapore's fertility rate is the second lowest in the world at just 0.87 children per woman. While the government has tried its fair share of tax credits to incentivize building a family, it's moving upstream in the baby-making funnel and helping them find someone to date.

11:40Neal Freyman:First Date works differently from your typical dating apps. Users verify themselves through a digital ID system, answer questions about their interests and values, and then receive just one match at a time. Behind that match is the Gale Shapely Stable Marriage algorithm, the same framework used to match medical residents with hospitals, which won a 2012 Nobel Prize in economics. The goal is to create stable pairings, avoiding a scenario where two people would both rather ditch their assigned partners for each other. Critics say that the whole thing feels a little dystopian. The government knows your identity, knows you're single, and is now telling you who you should date.

12:16Neal Freyman:But proponents prefer the one match at a time model since it saves them from the swipe fatigue plaguing traditional dating apps. Neil, is Singapore on to something here? They better be because Singapore, like other East Asian countries, this is one of the fastest aging countries in the world. They just recorded a record low fertility rate of 0.87 children per woman last year. That's very close to being the world's lowest. The world's lowest is South Korea at 0.8. Meanwhile, just to provide some context there, demographers say that a threshold of 2.1 is needed to maintain a stable population. So this population is not stable.

12:55Trying everything like all these other countries to throw something at the wall, hoping it sticks. Last month, the prime minister unveiled a new measure that would offer parents more than$55 ,000 per child until the age of 17. Still, it looks like Singapore is on its way to becoming what is described as a super-aged society, which is where more than 21 % of the population is age 65 or older. So you can see their desperation here. They held a hackathon to try to find a particular app that might work, and they landed on this one. But going maybe back to first principles, which is this stable marriage algorithm that won the Nobel Prize, seeing if they can rely on some math to boost their population.

13:35Neal Freyman:Yeah, they've seen this framework worked in other parts of the world. I mentioned medical residency matching. That's a big part of trying to get people where they want to be, but also public school admissions use of this. Dating apps have used this in the past as well. Really, the goal here is to have no one eyeing another match saying like, oh, I wish I was with that person. You want both people to be satisfied or at least they don't prefer another person over the person that they are with, which maybe is evocative of like what dating is in general in 2025. You just want to be satisfied. You don't want to be longing for someone else.

14:12Neal Freyman:But people are having pretty mixed reactions to it because some are very happy because they love the verification piece because everyone verified is a public servant. They believe the likelihood of being scammed is lower. So that is someone who's probably been through the ringer and said, I'm just happy to have verified people that I know are real. But then on the other side of it, too, people pointed out the 21 to 35 age cutoff showing that this is really about spurring people to have children, not necessarily about helping people find love. So criticism, proponents, you see it before. Singapore has thrown a lot at this problem in years past.

14:52Neal Freyman:If you go back 40 years ago, they created something called the Social Development Unit to organize social events where single university graduates could meet. So this is not the first time they've taken a stab at trying to jack up the birth rate because, as you mentioned, it's an existential problem for this country. All right, we're going to take a quick break and come back with Neil's numbers right after this. Neil, do you know where AI actually creates an advantage when it comes to deals? Finding coupons? Wrong kind of deals. Data site FD Longitude recently heard from 1 ,000 dealmakers to understand how AI changes the way dealmakers do deals.

15:31More than half of respondents say human-only decision-making is no longer enough for complex deals. The real competitive edge is knowing where AI can have the biggest impact and where human judgment still makes the difference.

15:41Neal Freyman:Go to datasite.com slash brew for a full breakdown of the results. That's datasite.com slash brew. Did you feel a shift? Yes, I moved everything three centimeters to the left. It's very exciting. No, the shift in how business runs with AI. Right. Rubric helps make sure that shift actually works in your favor instead of against you. With Rubric, you don't have to choose between moving fast and staying secure thanks to their agentic cyber resilience. One platform covering a company's data, its identities and its AI systems. See what it looks like when security and AI operations work together at rubric.com slash MB.

16:20That's R-U-B-R-I-K dot com slash MB. Toby, where would you go with$1 ,500 to spend on airfare?

16:28Neal Freyman:First class round flip to my favorite place on earth, Bloomington, Minnesota, baby. Well, with MasterCard Black Card, you can earn up to 75 ,000 bonus points after qualifying account activity with their limited time offer. That's worth up to$1 ,500 when redeemed toward airfare with no blackout dates or seat restrictions. They're going to have to drag me out of the ball of America. Visit luxurycard.com slash brew for more details. That's luxurycard.com slash brew offer and soon terms and conditions apply. Welcome to Neil's Numbers, the segment where I share three stats in the week's news that will start your October off on a super nerdy note.

17:08For my first number, AI is driving up healthcare spending and there are receipts to prove it. Last week, the insurer group Blue Cross Blue Shield Association said that hospitals deploying AI had led to nearly$1 billion in additional expenses from 2023 to 2025. And the most damning part of it is patients weren't necessarily receiving more treatment as a result of these costs. The healthcare industry has embraced artificial intelligence in the hopes it can be transformative for the sector, lowering the time spent on paperwork, streamlining payments, and in general, lightening the load on clinicians.

17:41But what makes AI so good at that busy work also means it's really, really good at finding more things to bill for. Basically, it can scan a patient's records and spot additional secondary diagnoses that qualify for higher payments, no matter if a patient will be treated for that. Insurers are ticked off about it, laying the blame at hospitals and the perverse incentives that drive billing. A senior VP at Blue Cross said the disconnect between diagnoses and treatment suggests that AI is identifying more billable conditions, not sicker patients. While the technology's boosters say AI will ultimately drive prices down in healthcare, it looks to be spurring inflation, at least for now.

18:17At a conference last week, CMS administrator Dr. Mehmet Oz said short-term, AI is going to be inflationary because it's going to turbocharge the ability of the current billing systems to work more effectively. Toby, when it comes to healthcare billing, AI is a menace.

18:31Neal Freyman:The big fear here is that you end up with bots fighting bots. Consider this scenario. A provider AI finds reasons to increase a claim and then the insurer AI searches for reasons to challenge it. Then the provider AI generates an appeal. The insurer AI generates a system review of the appeal. And then you just go around in circles forever and forever. However, when you lower the cost, both the actual cost and the time cost of fighting over these individual claims, you might just have bots fighting bots forever spiraling into never ending claim processes. The other side, though, is AI could lower costs.

19:10Neal Freyman:There is an optimistic scenario here. Harvard health economist David Cutler argues that AI could actually eliminate a lot of the human administrative work. That's kind of the grand promise of AI because one of healthcare's major expenses is just administration. So there is maybe a brighter path that this could go down. But right now, it looks like it's going down the inflationary path. My next number is 4Gs, which is a couple Gs too many while riding one of the world's most extreme roller coasters. This week, Six Flags Magic Mountain retired its X2 roller coaster that had come under legal assault for links to catastrophic brain injuries.

19:47The coaster, a premier attraction of this park outside of Los Angeles, opened in 2002 as X and got a rebrand as X2 in 2008. It is, well, was one of the three roller coasters in the world that employs a so-called fourth dimension, meaning its seats rotate 360 degrees independently of the direction of the trains, creating a very disorienting sensation. combined with track speeds of up to 80 miles per hour. Riders pulled 4Gs, which is greater than the gravitational force astronauts felt when lifting off on the space shuttle. For more than a decade, X2 has faced allegations that it was unsafe, but scrutiny ramped up this summer when CNN published an investigation documenting more than a dozen hospitalizations and serious injuries associated with the roller coaster, including at least two deaths.

20:32Just last week, more than 100 new victims came forward with fresh allegations. Six Flags maintains that X2 was safe, claiming it passed industry standard acceleration tests in three different years, but ultimately they decided to shut it down with the company president saying, when we see guest confidence affected, we take it seriously.

20:49Neal Freyman:This ride sounds terrifying. In addition to this fourth dimensional design, it also includes two Raven turns. And I had to look this up on Coasterpedia. It is a specialized half inversion element that resembles half of a vertical loop followed by a very steep drop right after it. That Coasterpedia says leaves riders inverted or transitions them between positions very quickly. So in addition to the fact that you're spinning all around, it does have two of these elements that are, you know, thrilling, but also maybe potentially dangerous. Hence why we saw this investigation uncovering all of these brain injuries over the last couple of years.

21:27And for my final number, the snow forecast out west is looking better this winter, but the financial forecast for Vail keeps getting worse. In its recent earnings report, the mountain resort giant said it sold 12 % fewer epic passes through September 18th compared to last year, and it doesn't expect to make up the shortfall before the ski season starts. For the fiscal year, skier visits were down 13.4 % and profits were chopped nearly in half. The epic fail points to another rough winter for Vail, which in the past couple of years has struggled with bad press, labor unrest, and a tapped out skiing consumer.

22:00But you can't discount the impact of the snow, or should I say lack of it. No doubt you heard from your ski friends that Colorado had its worst snowpack year on record during the 2025-2026 season. From the looks of it, memories of half closed mountains and dirt line runs are still lingering in people's minds for the upcoming winter to turn around this leaking ship veil is trying a few different ideas one is courting the youth by making epic passes 20 cheaper for skiers and snowboarders ages 13 to 30 another is diversifying revenue away from lift tickets investing more in lessons gear dining and