The IRS Is Buying an AI Supercomputer From Nvidia

The Intercept

14-02-2025

As the Trump administration and its cadre of Silicon Valley machine-learning evangelists attempt to restructure the administrative state, the IRS is preparing to purchase advanced artificial intelligence hardware, according to procurement materials reviewed by The Intercept.
With Elon Musk's so-called Department of Government Efficiency installing itself at the IRS amid a broader push to replace federal bureaucracy with machine-learning software, the tax agency's computing center in Martinsburg, West Virginia, will soon be home to a state-of-the-art Nvidia SuperPod AI computing cluster. According to the previously unreported February 5 acquisition document, the setup will combine 31 separate Nvidia servers, each containing eight of the company's flagship Blackwell processors designed to train and operate artificial intelligence models that power tools like ChatGPT.
The hardware has not yet been purchased and installed, nor is a price listed, but SuperPod systems reportedly start at $7 million. The setup described in the contract materials notes that it will include a substantial memory upgrade from Nvidia.
Though small compared to the massive AI-training data centers deployed by companies like OpenAI and Meta, the SuperPod is still a powerful and expensive setup using the most advanced technology offered by Nvidia, whose chips have facilitated the global machine-learning spree. While the hardware can be used in many ways, it's marketed as a turnkey means of creating and querying an AI model. Last year, the MITRE Corporation, a federally funded military R&D lab, acquired a $20 million SuperPod setup to train bespoke AI models for use by government agencies, touting the purchase as a 'massive increase in computing power' for the United States.
How exactly the IRS will use its SuperPod is unclear. An agency spokesperson said the IRS had no information to share on the supercomputer purchase, including which presidential administration ordered it. A 2024 report by the Treasury Inspector General for Tax Administration identified 68 different AI-related projects underway at the IRS; the Nvidia cluster is not named among them, though many were redacted.
But some clues can be gleaned from the purchase materials. 'The IRS requires a robust and scalable infrastructure that can handle complex machine learning (ML) workloads,' the document explains. 'The Nvidia Super Pod is a critical component of this infrastructure, providing the necessary compute power, storage, and networking capabilities to support the development and deployment of large-scale ML models.'
The document notes that the SuperPod will be run by the IRS Research, Applied Analytics, and Statistics division, or RAAS, which leads a variety of data-centric initiatives at the agency. While no specific uses are cited, it states that this division's Compliance Data Warehouse project, which is behind this SuperPod purchase, has previously used machine learning for automated fraud detection, identity theft prevention, and generally gaining a 'deeper understanding of the mechanisms that drive taxpayer behavior.'
'The IRS has probably more proprietary data than most agencies that is totally untapped.'
It's unclear from the document whether the SuperPod purchase had been planned under the Biden administration or if it represents a new initiative of the Trump administration.
Some funding from the 2022 Inflation Reduction Act was earmarked for upgrading IRS technology generally, said Travis Thompson, a tax attorney with Boutin Jones with an expertise in IRS AI strategy. But 'the IRS has been going toward AI for quite some time prior to IRA funding,' Thompson explained. 'They didn't have enough money to properly enforce the tax code, they were looking for ways to do more with less.' A June 2024 Government Accountability Office report suggested the IRS use artificial intelligence-based software to retrieve 'hundreds of billions of dollars [that] are potentially missing from what should be collected in taxes each year.'
Thompson added that the agency is ripe for machine-learning training because of the mountain of personal and financial data it sits atop. 'The IRS has probably more proprietary data than most agencies that is totally untapped. When you look at something like this Nvidia cluster and training machine learning algorithms going forward, it makes perfect sense, because they have the data there. AI needs data. It needs lots of it. And it needs it quickly. And the IRS has it.'
The purchase comes at a crossroads for U.S. governance of artificial intelligence tech. In Trump's first term, the RAAS office was assigned 'responsibility for monitoring and overseeing AI at the IRS' under Executive Order 13960, which he signed shortly before leaving office in 2020. This executive order put an emphasis on the 'responsible,' 'safe' implementation of AI by the United States — an approach that has fallen out of favor by American tech barons who now advocate for the breakneck development of these technologies unburdened by consideration of ethics or risk. One of Trump's first moves following his inauguration was reversing a Biden administration executive order calling for greater AI safety guardrails in government use.
Many of the AI industry for whom 'safe AI' is now anathema have become close allies of the new Trump White House, such as Elon Musk and venture capitalist Marc Andreessen. This wing of Silicon Valley has reportedly pushed the new administration to leverage artificial intelligence to help dismantle the administrative state via automation.
This week, the Wall Street Journal reported Musk's liquidators had arrived at the IRS, an agency long the target of disparagement and distortion by Trump and Republican allies. Days before, the New York Times reported, 'Representatives from the so-called Department of Government Efficiency have sought information about the tax collector's information technology, with a goal of automating more work to replace the need for human staff members.'
The IRS has in recent years increasingly turned to AI for automated fraud detection and chatbot-based support services — including through collaboration with Nvidia — but a new Nvidia supercomputer could also be a boon to those interested in shrinking the agency's human headcount as much as possible. A February 8 report by the Washington Post quoted an unnamed federal official who described Musk's end goal as 'replacing the human workforce with machines,' and that 'Everything that can be machine-automated will be. And the technocrats will replace the bureaucrats.'
Musk underlings are reportedly contemplating replacing humans at the Department of Education with a large language-based chatbot, as well.
Wired previously reported that Musk loyalist Thomas Shedd, placed in a directorship within the General Services Administration, has talked of an 'AI-first' agenda for Trump's second term; DOGE staffers have already reportedly turned to Microsoft's Azure AI platform for advice on slashing programs. While the Nvidia SuperPod couldn't on its own replicate services like those provided by Microsoft, it is powerful enough to train AI models based on government data.
Thompson told The Intercept that efforts to slash the federal workforce and more aggressively deploy artificial intelligence systems fit hand-in-glove.
'I firmly believe that rooted behind the reduction in the human workforce that seems to be goal of current administration, there's an overarching goal there to implement more technology-based systems in order to do the jobs,' he explained. 'If you're going to reduce your workforce, something has to pick up the slack. Something has to do the job.'