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

0:00We all love connecting over a video call, a quick text, or that group chat that literally never sleeps. And right now AT&T's got a deal worth texting the group about. You can get the new iPhone 18 Pro for $0 with iPhone Tradin, any condition. It's got the ultimate Pro camera system and a big leap in battery life, so you can turn this deal into a long-lasting connection. Connecting changes everything. Requires Tradin of iPhone 14 or higher excluding iPhone 16E, an eligible plan. Some restrictions apply, subject to change, visit an AT&T store for details. Good morning, Brudaly Show. I'm Neil Friman. And I'm Toby Howell. Today, How Metta uses data centers to avoid billions in taxes. Then, Ken Griffin just made the single largest donation to a college in US history. It's Thursday, October 1st. Let's ride. Thank you so much to everyone who voted for us in the Signal Awards Best Business Podcast

1:01category. Thanks to you, we vaulted to the lead and hoped 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 eat out a victory over Bear 910 with a little over 50% of the poll. Now, Toby, backpack has a very interesting backstory as their little fat bear nepotism at play. It 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 ston it over my boy, Chunk, though, who won the 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. Now, a word from our sponsor, Roku Ads Manager, deal a $5,000 reward.

2:02Sounds pretty nice. What did she 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. All these 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. Now, 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 Malon University to help fund a new expansion campus in the Sunsign State.

3:03The $3 billion is the single largest gift ever donated to a US university and serves as a further example of how all in on Miami Griffin is. The Florida native founded Citadel, the market maker in 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 belled out an entirely new satellite campus that will serve about 3,500 students. 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. Michigan 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. They'll be a big gift in an even bigger bet that Miami can metamorphose into a high tech

4:03and high finance butterfly. Yeah, despite all of the hype over the past few years, Miami still is that reputation as being a place for billionaires, second homes, and just a transient workforce where many people go there when maybe they're a little younger and they leave for other cities because they're just better job opportunities are reminded of the succession line. I love you, but you're not serious people. With this $2 billion gift and putting Carnegie Mellon in Miami in Winwood, 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

5:06industries of the 21st century. Thanks. This will be a game changer. I'll do 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 do industrialized now we're in, you know, the AI age show 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 Manna. He is the guy who sold the land for the winwood campus to Ken Griffin for over $1 billion. 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, in Samonti who runs a CRE newsletter, Manna started assembling those properties back in 2009 and all in paid about $70 million for it.

6:10Now 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. You know, if you go to Miami, it's basically just Ken Griffin everywhere. He's putting this imprint on this particular city after moving from Chicago a few years ago. 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. The group in Boca lived in, went to Harvard, lived in Chicago, and now he's absolutely turning Miami into his own image. There's a little bit of a arms race happening within Florida's education system, though,

7:10because Steven 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. There 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 it and recent Horowitz, the VC firm do this two year program that will get people prepped for the AI future. It looks like something is, you know, something that Ken Griffin is doing here is not particularly that radical, but it's in that direction of saying, you're going to go here to learn technical skills to get a job in this AI world going forward.

8:14Okay, moving on, I'm going to need the lawyers at Metta to start doing my taxes. A 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 adjunct experiment potentially doomed to fail. The move has reportedly caused some anxiety within Metta'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, Metta 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. The idea is to ask forgiveness rather than permission, or, in other words, move fast and break things. The strategy has been incredibly lucrative because of the tax credit. Metta saved $3.9 billion off its bill in 2025 and $2 billion the year before that.

9:16Metta's response, everything it's doing is above board. Spokesman Andy Stone said over the last five years, Metta 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. The question is, how long can Metta run this scheme until the feds start knocking? There's essentially two narratives that Metta has to give to two separate groups about its AI build out to investors. They have to say, oh, AI is this sure bet. It's absolutely going to have returned for us. AI is a 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 like 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.

10:20Let's be clear on that. Apple, Amazon, Alphabet, Microsoft, every one of those companies reports more than one billion dollars 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. They're spending hundreds of billions of dollars every year. And if you can shave a couple of billy off of that, 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 September to the end. Investors are super hype about mues 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

11:23place. 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. 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. First date works differently from your typical dating apps. Users verified themselves through a digital ID system, answer questions about their interest and values, and then receive just one match at a time.

12:24Behind that match is the Gale Shapley 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 your single and is now telling you who you should date, but proponents prefer the one match at a time model since it saves them from the swipe fatigue plaguing traditional dating apps. It's Singapore on to something here. They better be because Singapore, like other East Asian countries, 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.

13:26So this population is not stable trying everything, like all these other countries just shown. Something at the wall, hoping it sticks last month, the Prime Minister on a build, a new measure that would offer parents more than $55,000 per child until the age of 17 still looks like Singapore's odds way to becoming what is described as a super age society, which is where more than 21% of the population is age 65 or older. So you can see their desperation here. They hold a hackathon to try to find a particular app that might work and they landed on this one. They 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. 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 emissions 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

14:29with 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 a vocative 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, 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, two people pointed out the 21 to 35 age cut off 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. If you go back 40 years ago, they created something called the social development unit to organize

15:31social 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 Niels Numbers right after this. Niels, do you know where AI actually creates an advantage when it comes to deals? Finding coupons? Wrong kind of deals. Data site and FD longitude recently heard from 1000 deal makers to understand how AI changes the way deal makers do deals. More 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. 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.

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17:34Welcome to Niels Numbers, the segment where I share three stats in the week's news that will start your October off on a super nerdy note. For my first number, AI is driving up health care spending and there are receipts to prove it. 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 health care 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. Although it makes AI so good at that busy work, also means it's really, really good at finding more things to bill for. Basically, you 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.

18:35A senior VP at Blue Cross said the disconnect between diagnoses and treatments suggests that AI is identifying more billable conditions, not sicker patients. While the technology's boosters say AI will ultimately drive prices down in health care, it looks to be spurring inflation at least for now. At 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 health care billing, AI is a menace. 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. The insurer, AI searches for reasons to challenge it. The provider, AI, generates an appeal. The insurer generates a system review of the appeal. You just go around in circles forever and forever. 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

19:37ending claim processes. The other side though is AI could lower cost. 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 health care'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 4G's, which is a couple of G's 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. The 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 it seats rotate 360 degrees independently of the direction of

20:38the trains, creating a very disorienting sensation. Combined with track speeds of up to 80 miles per hour, riders pulled four G's, 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 the 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. Just 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 test 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. This ride sounds terrifying. In addition to this fourth dimensional design, it also includes two raving turns, and I had to look this up on coaster pdia. It is a specialized half inversion element that resembles half of a vertical loop followed by a very steep drop right after it that a coaster pdia says leaves riders inverted or

21:44transitions them between positions very quickly. In addition to the fact that you're spinning all around, it does have two of these elements that are thrilling, but also maybe potentially dangerous, hence why we saw this investigation uncovering all of these brain injuries over the last couple of years. For my final number, the snow forecast out west is looking better this winter, but the financial forecast for Vale keeps getting worse. 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 Vale, which in the past couple of years has struggled with bad press, labor unrest, and a tapped out skiing consumer. But 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 snow pack year on record during the 2025-2026 season.

22:44From the looks of it, memories of half-close mountains and dirtline runs are still lingering in people's minds for the upcoming winter. To turn around this leaking ship, Vale is trying a few different ideas. One is courting the youth by making epic passes 20% cheaper for skiers and snowboarders ages 13-30. Another is diversifying revenue away from lift tickets, investing more in lessons gear dining in a hospitality. Epic has spent, or I mean Vale, I spent a lot of years pushing customers towards Epic and it actually helped them in this down snow season because they had, quote, meaningful stability from their, that's the executive team talking. Because the snow was terrible, they already collected a lot of their revenue because you pay up front for these epic passes. So it helped them get through this year. But then the flip side is that now after experiencing that terrible season, a lot of these customers don't want to get burned again so they don't want to invest in the epic pass. The silver lining, if you are Vale, is that if the snow comes out to be awesome, which it looks like it could be because a super El Nino is forming people just could just show

23:47up and buy daily lift tickets, which Epic are sorry, Vale also makes money off of. So it's kind of a win-win scenario for them. Maybe lose-lose if you are the consumer who are going to have to buy, you know, price your lift tickets instead of just taking the epic pass. All right, let's put it to the finish with some final headlines. An unbelievable story of bravery in the skies when passengers and crew on a flight from Dubai to Tel Aviv subdued a pilot who allegedly was intent on taking down the plane and its 174 passengers. The flight, a fly Dubai Boeing 737, was headed to Israel on Wednesday when all of a sudden it took a nose dive plummeting more than 16,000 feet in under a minute reaching nearly the speed of sound. According to Israeli Prime Minister Benjamin Netanyahu, one pilot had stabbed the other pilot in the cockpit in an attempt to hijack and crash the plane. The pilot who was injured managed to unlock the cockpit door. Some passengers and crew rushed in to subdue the attacker and took the plane out of its nose dive before it was landed safely in Saudi Arabia by other pilots who had been on the aircraft.

24:48The injured pilot who was identified as Indian citizen's sweet match-char, and the passengers who neutralized the attacker are being held as heroes who prevented a mass casualty event. Netanyahu said it was too early to know the precise motive or who was ultimately behind the attempted hijacking. Maybe the craziest part is that while the passengers were wrestling with the attacker, a guy who is a plumber by trade jumped behind the controls and in his words started pulling back on the handle the way he had seen in television shows, then eventually other crew members took over. But pretty crazy that literally he's like, I think I've seen this in the movies and you just pull back on the yoke and it ended up arresting the plane from its steep nose dive and you know, kind of saving everyone. Finally, Mike Tomlin is a legendary head coach in the NFL who spent 19 years with the Pittsburgh Steelers and shockingly never recorded a single losing season. But that might be the second most interesting fact about him. Tomlin took to YouTube yesterday to show off a city that he's built in Minecraft and nearly 20 minute deep dive where he showed off his high rise building and urban planning

25:51acumen in a project that has taken him 12 years to construct. Tomlin said that he likes to build stuff and also appreciated that the game let him spend time with his kids, but admitted their participation became less and less over the years while his participation at times increased the amount of detail Tomlin put into this thing was staggering. He put the appropriate number of restrooms inside any public building and was view conscious when building high rises to make sure the high end apartments had good sight lines. Just goes to show you how you never really know these people you cheer for or against on TV. How many other hidden Minecraft cities route there just waiting to be broken down in a 20 minute video? Extremely awesome. And just the duck juxtaposition of seeing this guy who we saw prowl the sidelines like with this scowl and he's in these huge and all you think all he thinks about is football. And no, it turns out he's a huge urban planning nerd and had bonded with his kids over this game. And I think that was really the most wholesome part is I saw a lot of parents say, yeah,

26:53my kid is so into Minecraft like I completely see what Mike Tomlin is doing here. How he how he cultivated this relationship with his kids through Minecraft. Yeah, the same thing is happening in my household. So I'm sure there were watch parties all over the country with parents and their kids watching Mike Tomlin. And I think it blew everyone away the level of detail in his level of thoughtfulness and putting this, you know, thought into his Minecraft city. His former players though, Lavin on Bell was his running back for the Steelers. Quotes where he can go is. We were trying to win Super Bowls and you were building a Minecraft city and obviously and gotta have a side question. Yeah, the NFL high mind wanted to dig into how his performance was pre Minecraft city and post Minecraft city. And it's kind of damning evidence because before Minecraft, there were seven seasons that Tomlin coached the Steelers one Superbowl win two Superbowl trips in a five and three overall record in the playoffs. Once Minecraft came out and he started building the city, which was 12 seasons, zero Superbowl wins, zero Superbowl trips and just three playoff wins, three and nine total records.

27:58So maybe it was through the detriment of the Oranus. I mean, I'm just alright. He lost more football games, but he won our hearts. True. There you go. And now I'm looking forward to the second episode. Exactly. Okay, that is all the time we have. Thanks so much for starting your morning with us and have a wonderful Thursday to share your thoughts on the episode or anything else. Send an email to morningbrewdaleyatmorningbrew.com. Or DM us on Instagram at MB Daily Show. Let's roll the credits. Emily Million is our Supervising producer. Raymond Lue is our senior producer. Our producer is Olivia Graham and our associate producer is Olivia Lake, technical direction by Nina Miller. Her make up is just going to skewer a month this year who needs the West. Devon Emory is our president and our show's a production of Morning Brew. Great. Let's run it back tomorrow.