Subj : Full depreciation in one year
To   : All
From : Joseph Pereira
Date : Tue Nov 11 2025 05:51:59


In the US, Trump wants to stimulate factory construction by allowing factories and equipment to be depreciated in a single year.

What does that mean?

It means you can immediately deduct the millions you invest in a new factory from your profit in a single year.

So, if you already have a successful business, thanks to this provision, which was included in Trump's Big Beautiful Bill, you can invest and, as long as you make a profit, recoup most of the costs immediately. Normally, you have to depreciate over 30 to 40 years.

Will this also mean that people will invest en masse?

I think we can reduce the enormous, truly enormous, investments in AI factories to this provision.

In effect, the government is paying for a significant portion of the investment.

So companies in that sector are currently indulging in extreme investments. You could almost say: the government is paying for it.

But that doesn't mean that the investment will actually generate revenue. In fact, I think a huge amount of investment will be lost. Building hardware is one thing. Hiring staff for it, selling products—all that still needs to be done afterward.

I'm not so optimistic about that, because of the overspending on data centers. There will soon be enormous competition there, and no one will make any money. Suddenly, there will be far too much capacity.

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