Meta's $15 Billion Investment in Scale AI: A Strategic Move to Boost AI Capabilities

Meta beefs up disappointing AI division with $15 billion Scale AI investment

Meta has invested $15 billion into data-labelling start-up Scale AI and hired its co-founder Alexandr Wang, as part of its bid to attract talent from rivals in a fiercely competitive market. The deal values Scale at $29 billion, double its valuation last year. Scale said it would "substantially expand" its commercial relationship with Meta "to accelerate deployment of Scale's data solutions," without giving further details. Scale helps companies improve their artificial intelligence models by providing labelled training data. Scale will distribute proceeds from Meta's investment to shareholders, and Meta will own 49 percent of Scale's equity following the transaction. Wang, who was also Scale's chief executive, will "work on Meta's AI efforts" in his new role. Meta, however, did not reveal his new job title. Wang, 28, is set to remain on the board of directors at Scale, which has named Jason Droege as chief strategy officer. Droege helped launch Uber Eats as interim CEO and joined Scale in September. "Meta's investment recognises Scale's accomplishments to date and reaffirms that our path forward -- like that of AI -- is limitless," Wang said. "I'm delighted that Jason will lead the next steps in Scale's journey." Meta's investment is the latest attempt by chief executive Mark Zuckerberg to give his $1.8 trillion social media company an edge in the race to develop more powerful AI models. Zuckerberg has been trying to poach top researchers and engineers from rival groups as he seeks to build out a new "superintelligence" team. The deal is one of the biggest of its kind as tech companies increasingly strike agreements to invest in start-ups while acquiring their top staff. Last year, Microsoft paid $650 million to hire Inflection boss Mustafa Suleyman and his top lieutenants, and to license the start-up's technology. Google also paid $2.7 billion for a similar arrangement with Character.AI. Meta has invested heavily in generative AI, with the majority of its planned $72 billion in capital expenditure this year earmarked for data centres and servers. The deal underlines the high price AI companies are willing to pay for data that can be used to train AI models. Zuckerberg pledged last year that his company's models would outstrip rivals' efforts in 2025, but Meta's most recent release, Llama 4, has underperformed on various independent reasoning and coding benchmarks. The long-term goal of researchers at Meta "has always been to reach human intelligence and go beyond it," said Yann LeCun, the company's chief AI scientist at the VivaTech conference in Paris this week. Building artificial "general" intelligence -- AI technologies that have human-level intelligence -- is a popular goal for many AI companies. An increasing number of Silicon Valley groups are also seeking to reach "superintelligence," a hypothetical scenario where AI systems surpass human intelligence. The core of Scale's business has been data-labelling, a manual process of ensuring images and text are accurately labelled and categorised before they are used to train AI models. Wang has forged relationships with Silicon Valley's biggest investors and technologists, including OpenAI's Sam Altman. Scale AI's early customers were autonomous vehicle companies but the bulk of its expected $2 billion in revenues this year will come from labelling the data used to train the massive AI models built by OpenAI and others. The deal will result in a substantial payday for Scale's early venture capital investors, including Accel, Tiger Global Management and Index Ventures. Tiger's $200 million investment is worth more than $1 billion at the company's new valuation, according to a person with knowledge of the matter. Additional reporting by Tabby Kinder in San Francisco © 2025 The Financial Times Ltd. All rights reserved Not to be redistributed, copied, or modified in any way.

Meta reportedly in talks to invest billions of dollars in Scale AI | TechCrunch

Meta is discussing a multi-billion dollar investment in Scale AI, according to Bloomberg. In fact, the deal value could reportedly exceed $10 billion, making it the largest external AI investment for the Facebook parent company and one of the largest funding events ever for a private company. Scale AI (whose CEO Alexandr Wang is pictured above) provides data labeling services to companies such as Microsoft and OpenAI to help them train their AI models. Much of that labeling work is done by contractors -- in fact, the Department of Labor recently dropped its investigation into whether the company was misclassifying and underpaying employees. According to Bloomberg, the company saw $870 million in revenue last year and expects to bring in $2 billion this year. Meta was already an investor in Scale AI's $1 billion Series F, which valued the company at $13.8 billion. Scale AI also built Defense Llama, a large language model designed for military use, on top of Meta's Llama 3.

Can Scale AI and Alexandr Wang reignite Meta's AI efforts? | TechCrunch

Meta is reportedly investing nearly $15 billion dollars in the data labeling firm Scale AI and taking a 49% stake in the startup, while also bringing on CEO Alexandr Wang to help lead a new "superintelligence" lab within the company. The deal is reminiscent of Meta's previous large and risky bets, such as its $19 billion acquisition of WhatsApp and its $1 billion Instagram purchase. At the time those mergers closed, many people suggested Meta had grossly overpaid for the platforms -- and today's discourse is no different. There's no shortage of investors and founders who were left scratching their heads this weekend over Meta's latest tie-up. In the end, WhatsApp and Instagram became an integral part of CEO Mark Zuckerberg's empire. The question is whether the Scale AI deal will similarly work in Meta's favor, proving Zuckerberg's prescient strategy yet again, or whether the company is grasping at straws in a misguided effort to catch up to rivals like OpenAI, Google, and Anthropic. In this case, Meta isn't betting on an emerging social media app, but on the data used to train top AI models. For the last several years, leading AI labs such as OpenAI have relied on Scale AI to produce and label data that's used to train models. In recent months, Scale AI and its data annotation competitors have started hiring highly skilled people, such as PhD scientists and senior software engineers, to generate high-quality data for frontier AI labs. It may benefit Meta to have a close relationship with a data provider like Scale. Meta's leaders have complained about a lack of innovation around data in the company's leading AI teams, according to a person familiar with the matter. Earlier this year, Meta's GenAI unit launched Llama 4, a family of AI models that failed to match the capabilities of Chinese AI lab DeepSeek's models, and which was broadly seen as a disappointment. Not helping matters, Meta is trying to combat an attrition problem. According to data compiled by SignalFire, Meta lost 4.3% of its top talent to AI labs in 2024. Meta isn't just betting on Scale AI to reignite its AI efforts, but also on Wang to lead the aforementioned new superintelligence team. The 28-year-old CEO has proven himself to be a strong startup founder -- he's known around Silicon Valley to be ambitious, a good salesman, and very well-connected. Over the past few months, Wang has been meeting with world leaders to discuss AI's impact on society. Wang hasn't led an AI lab of this sort before, however, and he doesn't have the same AI research background that many other AI lab leaders do, like Safe Superintelligence's Ilya Sutskever or Mistral's Arthur Mensch. That's perhaps why Meta is also said to be recruiting high-profile talent like DeepMind's Jack Rae to round out its new AI research group. The post-acquisition fate of Scale AI the company is a bit murky. The role of real-world data in AI model training is changing -- some AI labs have brought data collection efforts in-house, while others have increased their reliance on synthetic (i.e. AI-generated) data. In April, The Information reported that Scale AI had missed some of its revenue targets. According to Anyscale co-founder Robert Nishihara, several frontier AI labs are exploring novel ways to leverage and optimize data, many of which are quite compute-intensive. "Data is a moving target," Nishihara told TechCrunch in an interview. "It's not just a finite effort to catch up -- you have to innovate." It's possible that Meta and Wang's relationship could scare off other AI labs that have traditionally worked with Scale AI. If so, this deal could be a boon for Scale AI's competitors, such as Turing, Surge AI, and even nonconventional data providers such as the recently launched LM Arena. Turing CEO Jonathan Siddharth told TechCrunch via email that he's received increased interest from customers in light of the rumors around Meta's deal with Scale AI. "I think there will be some clients who will prefer to work with a partner that's more neutral," he said. Only time will tell how Meta's investment will pan out for its AI efforts, but the company has significant ground to make up. Meanwhile, the competition isn't slowing down. OpenAI is gearing up for the release of its next flagship model, GPT-5, as well as its first openly available model in years -- a model that'll compete with Meta's current and future Llama releases.

Scale AI confirms 'significant' investment from Meta, says CEO Alexanr Wang is leaving | TechCrunch

Data-labeling company Scale AI confirmed on Friday that it has received a "significant" investment from Meta that values the startup at $29 billion. The startup also said its co-founder and CEO Alexandr Wang is stepping down from his role to join Meta and help the bigger company with its AI work. Reports indicate that Meta invested about $14.3 billion for a 49% stake in the startup, which produces and labels data that's used to train the large language models that underpin a significant portion of generative AI development. Meta confirmed the investment. "Meta has finalized our strategic partnership and investment in Scale AI. As part of this, we will deepen the work we do together producing data for AI models and Alexandr Wang will join Meta to work on our superintelligence efforts. We will share more about this effort and the great people joining this team in the coming weeks," a spokesperson for Meta told TechCrunch. Jason Droege, Scale's current chief strategy officer, will hop in as interim CEO. Scale AI noted that Meta's investment will be used to pay investors and shareholders, as well as to fuel growth. The company emphasized that it remains an independent entity. Wang will continue at the data-labeling firm as a director on its board. As my colleague Max Zeff wrote on Wednesday, this investment is a way for Meta to improve its AI efforts as its rivals Google, OpenAI and Anthropic rush ahead, and the social media company's own AI model releases trail the competition. Plus, according to data by SingalFire, the company lost 4.3% of its top talent to other AI labs last year. For the last several years, leading AI labs such as OpenAI have relied on Scale AI to produce and label data that's used to train models. In recent months, Scale AI and its data annotation competitors have started hiring highly skilled people, such as PhD scientists and senior software engineers, to generate high-quality data for frontier AI labs. Just last year, Scale AI raised $1 billion last year from investors including Amazon and Meta at a valuation of $13.8 billion.

Scale AI confirms 'significant' investment from Meta, says CEO Alexandr Wang is leaving | TechCrunch

Data-labeling company Scale AI confirmed on Friday that it has received a "significant" investment from Meta that values the startup at $29 billion. The startup also said its co-founder and CEO Alexandr Wang is stepping down from his role to join Meta and help the bigger company with its AI work. Reports indicate that Meta invested about $14.3 billion for a 49% stake in the startup, which produces and labels data that's used to train the large language models that underpin a significant portion of generative AI development. Meta confirmed the investment. "Meta has finalized our strategic partnership and investment in Scale AI. As part of this, we will deepen the work we do together producing data for AI models and Alexandr Wang will join Meta to work on our superintelligence efforts. We will share more about this effort and the great people joining this team in the coming weeks," a spokesperson for Meta told TechCrunch. Jason Droege, Scale's current chief strategy officer, will hop in as interim CEO. Scale AI noted that Meta's investment will be used to pay investors and shareholders, as well as to fuel growth. The company emphasized that it remains an independent entity. Wang will continue at the data-labeling firm as a director on its board. As my colleague Max Zeff wrote on Wednesday, this investment is a way for Meta to improve its AI efforts as its rivals Google, OpenAI and Anthropic rush ahead, and the social media company's own AI model releases trail the competition. Plus, according to data by SingalFire, the company lost 4.3% of its top talent to other AI labs last year. For the last several years, leading AI labs such as OpenAI have relied on Scale AI to produce and label data that's used to train models. In recent months, Scale AI and its data annotation competitors have started hiring highly skilled people, such as PhD scientists and senior software engineers, to generate high-quality data for frontier AI labs. Just last year, Scale AI raised $1 billion last year from investors including Amazon and Meta at a valuation of $13.8 billion.

New details emerge on Meta's $14.3B deal for Scale

Meta's deal to partially acquire the AI startup Scale, giving it 49% ownership, is certainly unusual. What Scale officially announced is that the deal values the company at over $29 billion and that it will "distribute" proceeds to shareholders and vested equity holders (aka employees) granting them with "substantial liquidity" while allowing them to continue as shareholders. Meta is also hiring Scale's famed founder CEO Alexandr Wang, who famously dropped out of MIT at age 19 to build the company, which offers AI training data verified by humans. This might have sounded like Meta could buy shares from existing shareholders, but that's not the case, sources told Bloomberg. Investors are getting dividends. For instance Accel, which backed the company early, should get a payout of $2.5 billion, Bloomberg reports. (We've asked Accel for comment.) Scale has dozens of backers, including Amazon and Meta, and was last valued at $14 billion after raising a $1 billion Series F a year ago. So a payout of this magnitude is almost like buying the company. We'll have to wait and see if regulators agree.

Meta is reportedly making a $15 billion bet on AGI

Zuckerberg is said to be buying nearly half of Scale AI -- and recruiting the company's CEO, too 27; y='0' width='100%25' height='100%25'/%3E%3CfeComposite operator='out' in='s'/%3E%3CfeComposite in2='SourceGraphic'/%3E%3CfeGaussianBlur stdDeviation='20'/%3E%3C/filter%3E%3Cimage width='100%25' height='100%25' x='0' y='0' preserveAspectRatio='none' style='filter: url(%23b);' href='data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAAEAAAABCAQAAAC1HAwCAAAAC0lEQVR42mN8+R8AAtcB6oaHtZcAAAAASUVORK5CYII='/%3E%3C/svg%3E")" sizes="(max-width: 768px) 100vw, 700px" srcSet="https://platform.theverge.com/wp-content/uploads/sites/2/2025/06/gettyimages-2204057803.jpg?quality=90&strip=all&crop=0.00815660685155%2C0%2C99.983686786297%2C100&w=376 376w, https://platform.theverge.com/wp-content/uploads/sites/2/2025/06/gettyimages-2204057803.jpg?quality=90&strip=all&crop=0.00815660685155%2C0%2C99.983686786297%2C100&w=384 384w, https://platform.theverge.com/wp-content/uploads/sites/2/2025/06/gettyimages-2204057803.jpg?quality=90&strip=all&crop=0.00815660685155%2C0%2C99.983686786297%2C100&w=415 415w, https://platform.theverge.com/wp-content/uploads/sites/2/2025/06/gettyimages-2204057803.jpg?quality=90&strip=all&crop=0.00815660685155%2C0%2C99.983686786297%2C100&w=480 480w, https://platform.theverge.com/wp-content/uploads/sites/2/2025/06/gettyimages-2204057803.jpg?quality=90&strip=all&crop=0.00815660685155%2C0%2C99.983686786297%2C100&w=540 540w, https://platform.theverge.com/wp-content/uploads/sites/2/2025/06/gettyimages-2204057803.jpg?quality=90&strip=all&crop=0.00815660685155%2C0%2C99.983686786297%2C100&w=640 640w, https://platform.theverge.com/wp-content/uploads/sites/2/2025/06/gettyimages-2204057803.jpg?quality=90&strip=all&crop=0.00815660685155%2C0%2C99.983686786297%2C100&w=750 750w, https://platform.theverge.com/wp-content/uploads/sites/2/2025/06/gettyimages-2204057803.jpg?quality=90&strip=all&crop=0.00815660685155%2C0%2C99.983686786297%2C100&w=828 828w, https://platform.theverge.com/wp-content/uploads/sites/2/2025/06/gettyimages-2204057803.jpg?quality=90&strip=all&crop=0.00815660685155%2C0%2C99.983686786297%2C100&w=1080 1080w, https://platform.theverge.com/wp-content/uploads/sites/2/2025/06/gettyimages-2204057803.jpg?quality=90&strip=all&crop=0.00815660685155%2C0%2C99.983686786297%2C100&w=1200 1200w, https://platform.theverge.com/wp-content/uploads/sites/2/2025/06/gettyimages-2204057803.jpg?quality=90&strip=all&crop=0.00815660685155%2C0%2C99.983686786297%2C100&w=1440 1440w, https://platform.theverge.com/wp-content/uploads/sites/2/2025/06/gettyimages-2204057803.jpg?quality=90&strip=all&crop=0.00815660685155%2C0%2C99.983686786297%2C100&w=1920 1920w, https://platform.theverge.com/wp-content/uploads/sites/2/2025/06/gettyimages-2204057803.jpg?quality=90&strip=all&crop=0.00815660685155%2C0%2C99.983686786297%2C100&w=2048 2048w, https://platform.theverge.com/wp-content/uploads/sites/2/2025/06/gettyimages-2204057803.jpg?quality=90&strip=all&crop=0.00815660685155%2C0%2C99.983686786297%2C100&w=2400 2400w" src="https://platform.theverge.com/wp-content/uploads/sites/2/2025/06/gettyimages-2204057803.jpg?quality=90&strip=all&crop=0.00815660685155%2C0%2C99.983686786297%2C100&w=2400"/>

Meta prepares to launch research lab aimed at 'superintelligent' AI - report

The company is also apparently in talks to invest more than $10 billion in Scale AI. The most powerful tech leaders in Silicon Valley have been racing to build artificial general intelligence (AGI), a theoretical computer that, as some would define it, can outperform humans across every economically valuable task. Also: Apple's Goldilocks approach to AI at WWDC is a winner. Here's why Some leaders have their sights set even higher, on artificial "superintelligence," a system that's unfathomably more intelligent than human beings, so much so that our comparatively puny intellects can't even fathom what such a system would be capable of; it'd be like an ant trying to converse with John von Neumann. Now, Meta is slated to launch a research lab devoted to building superintelligent AI, according to a report from The New York Times. Alexander Wang, the 28-year-old founder of Scale AI, a startup that helps companies build AI apps, which could receive a multibillion-dollar investment from Meta soon, will reportedly join the new lab. Also: The 7 best AI features announced at Apple's WWDC that I can't wait to use The news marks Meta's latest effort to stay ahead in the ongoing AI race, which has engulfed much of the tech world since the launch of ChatGPT in 2022 revealed the technology's capabilities to a mainstream audience. The company has embedded its chatbot product, Meta AI, across its suite of social media platforms, Facebook, Instagram, and WhatsApp, and in its smart glasses. Meanwhile, Meta has sought to position itself as a more developer-friendly alternative to its competitors by open-sourcing its AI systems, including its family of Llama large language models. Companies like Meta (previously Facebook), which ascended during the rise of the internet and social media in the early 2000s and 2010s have rushed to embrace AI, widely touted as the technological backbone of the future. Also: The great AI skills disconnect - and how to fix it That strategic and economic shift has depended largely on the acquisition of newer, AI-focused startups: Google acquired DeepMind in 2014, later fusing it with its internal AI research lab, Google Brain, to create a new division called Google DeepMind; Microsoft has been pouring billions into OpenAI, and Amazon has been doing the same with Anthropic. Meta's planned investment in Scale AI, which, according to Bloomberg, could exceed $10 billion, would likely help the tech giant ratchet up its AI development at a time of growing competition for increasingly scarce computing resources and top AI talent. Also: AI is paving the way for a new type of organization - a Frontier Firm Meta is also offering seven-to-ten-figure salaries to researchers from competing firms, such as OpenAI and Google, according to The Times report, which cited anonymous sources with ties to the company. The term "superintelligence" was popularized by the Oxford philosopher Nick Bostrom in his 2014 book of the same name. The book served in part as a warning about the potential dangers of an AI "intelligence explosion" -- computing capabilities that advance suddenly in an exponential upward curve, escaping human control. Also: AI leaders must take a tight grip on regulatory, geopolitical, and interpersonal concerns Though Bostrom's views are now considered by some to be alarmist, there are many in Silicon Valley today (nicknamed "doomers") who worry about the potential existential risks of an AI system whose intellect is far greater than our own. But so far, at least, the capitalist incentive to build (led by so-called "boomers") has overshadowed such fears.

Meta is paying $14 billion to catch up in the AI race

Scale works with Google, OpenAI, and others to help train their models by having humans annotate and label the data that feeds them. Most of that work is done through low-cost labor outside of the US, and it has become a critical component of AI development. With Wang going to Meta, Scale is naming a new CEO: Jason Droege, its former chief strategy officer. "We've grown to over 1,500 people and become the trusted partner for model builders, enterprises, and governments building and deploying the smartest Al tools and applications," Wang said in a memo to Scale employees. "Scale is now one of the most impactful companies in the world, accelerating the development of what may be the most important technology in human history. Today, we are announcing a massive new investment from Meta. This is a major milestone and a powerful validation of the hard work you've all put into Scale's mission."

Meta Set to Throw Billions at Startup That Leads AI Data Market

Three months after the Chinese artificial intelligence developer DeepSeek upended the tech world with a model that rivaled America's best, a 28-year-old AI executive named Alexandr Wang came to Capitol Hill to tell policymakers what they needed to do to maintain US dominance. The US, Wang said at the April hearing, needs to establish a "national AI data reserve," supply enough power for data centers and avoid an onerous patchwork of state-level rules. Lawmakers welcomed his feedback. "It's good to see you again here in Washington," Republican Representative Neal Dunn of Florida said. "You're becoming a regular up here." Wang, the chief executive officer of Scale AI, may not be a household name in the same way OpenAI's Sam Altman has become. But he and his company have gained significant influence in tech and policy circles in recent years. Scale uses an army of contractors to label the data that tech firms such as Meta Platforms Inc. and OpenAI use to train and improve their AI models, and helps companies make custom AI applications. Increasingly, it's enlisting PhDs, nurses and other experts with advanced degrees to help develop more sophisticated models, according to a person familiar with the matter. Put simply: The three pillars of AI are chips, talent and data. And Scale is a dominant player in the last of those. Now, the startup's stature is set to grow even more. Meta is in talks to make a multibillion-dollar investment in Scale, Bloomberg News reported over the weekend. The financing may exceed $10 billion in value, making it one of the largest private company funding events of all time. The startup was valued at about $14 billion in 2024, as part of a funding round that included backing from Meta. In many ways, Scale's rise mirrors that of OpenAI. Both companies were founded roughly a decade ago and bet that the industry was then on the cusp of what Wang called an "inflection point of AI." Their CEOs, who are friends and briefly lived together, are both adept networkers and have served as faces of the AI sector before Congress. And OpenAI, too, has been on the receiving end of an 11-figure investment from a large tech firm. Scale's trajectory has shaped, and been shaped by, the AI boom that OpenAI unleashed. In its early years, Scale focused more on labeling images of cars, traffic lights and street signs to help train the models used to build self-driving cars. But it has since helped to annotate and curate the massive amounts of text data needed to build the so-called large language models that power chatbots like ChatGPT. These models learn by drawing patterns from the data and their respective labels. At times, that work has made Scale a lightning rod for criticisms about the unseen workforce in places such as Kenya and the Philippines that supports AI development. Scale has faced scrutiny for relying on thousands of contractors overseas who were paid relatively little to weed through reams of online data, with some saying they have suffered psychological trauma from the content they're asked to review. In a 2019 interview with Bloomberg, Wang said the company's contract workers earn "good" pay -- "in the 60th to 70th percentile of wages in their geography."

Meta Announces Scale AI Investment, Recruits CEO to AI Unit

Meta Platforms Inc. said it finalized a multibillion-dollar investment in Scale AI and recruited the startup's chief executive officer to help oversee its artificial intelligence efforts -- an unusual deal that signals a heightened push by the social media giant to catch up on AI development. Meta said Thursday that it has backed Scale, without including details. The size of the investment was $14.3 billion, according to a person familiar with the matter. The new $29 billion valuation includes the money raised, said the person, who asked not to be idenified discussing private information.

Meta offering $10m a year-plus for scarce AI talent: Source

Exclusive Meta has made lavish and lucrative offers to a select set of AI researchers in an effort to develop superintelligent AI. CEO Mark Zuckerberg himself has taken to emailing job offers to elite talent. One AI researcher told us Zuckerberg offered them an eight-figure salary - at least $10,000,000 a year. "I got an email from Mark personally," our source said. "And he said, 'I have an offer for you.' Wow, and the offer was crazy." The researcher, who may or may not accept the offer, asked not to be identified. The offer did not specify exactly what the job entailed. "I'm interested in how this will affect the job market," the person said. "I was really shocked to be honest." Citing discussions with others in the industry, the researcher said that it appears Meta simply made a list of around 50 to 100 people it really wants to hire and pursued them fiercely. The Register understands that the size of Meta's offers reflects recent difficulties recruiting top AI talent from among the small ranks of people who have successfully developed large foundation models at major companies. In a recent social media post, Deedy Das, a principal at venture capital firm Menlo Ventures, said, "Meta is currently offering $2M+/yr in offers for AI talent and still losing them to OpenAI and Anthropic. Heard ~3 such cases this week. The AI talent wars are absolutely ridiculous." Das pointed to a recent report from venture capital firm SignalFire that claims Meta lost 4.3 percent of its AI talent to other AI labs in 2024, the second highest attrition rate behind Google, at 5.4 percent. The report also includes data asserting Anthropic had the highest AI talent retention rate (80 percent) at a handful of AI companies for employees hired between 2021 and February 2023, followed by Google's DeepMind (78 percent), OpenAI (67 percent), Meta (64 percent), Cohere (64 percent), and Mosaic (63 percent). Competition for top GenAI talent has become extremely intense Two years ago, Yudian Zheng, former AI lead at Twitter, turned down an offer from Meta worth $1 million annually to co-found his own company, Jobright.ai. He told The Register in an email that he did so because he wanted the opportunity to build something meaningful and to help underserved job seekers use AI to their advantage. "I've spent time at companies like Google, Microsoft, and Twitter, so I have a good sense of how big tech operates," he said. "What I really value about Silicon Valley is its startup ecosystem - it's a place where ambitious people can build from scratch and create real impact." The role he turned down was with Meta's Generative AI ads team. "Meta has several GenAI efforts, both in foundational work like Llama and in applying AI to its core businesses like advertising," he said. "The team I was in discussions with was focused on applying GenAI to improve ad performance and automation." Asked whether Meta's eight-figure offers are unusual, Zheng said, "Not really - competition for top GenAI talent has become extremely intense. Training frontier models is a bit like alchemy: A small number of deeply experienced researchers can make a huge difference." He continued, "The market has recognized that, and compensation reflects it. Meta, OpenAI, Google DeepMind, Anthropic, and xAI are all aggressively hiring, but the actual talent pool with meaningful foundation model experience is still very small." Meta uses AI to support its social network and advertising business. It offers the Meta AI assistant, a LLaMA-based chatbot service on the web and in Android and iOS apps. It has deployed AI models to help with social media recommendations, content moderation, ad targeting and ad creation. Its AI research group tries to advance the state of the art and recently released a video-trained "world model" called Meta Video Joint Embedding Predictive Architecture 2 (V-JEPA 2) to help robots with real-world navigation. Word of Meta's ambition to form a new AI team staffed by top talent was first reported by Bloomberg, which also noted that Zuckerberg was personally involved in recruiting. Zuckerberg has tapped Alexandr Wang, CEO of Scale AI, to lead the group, as part of a deal that has Meta investing a reported $15 billion in data labeling business. Wang made the announcement in a social media post on Thursday, naming Chief Strategy Officer Jason Droege as interim CEO. Meta and Scale AI did not respond to requests for comment. Observers have speculated that the disappointing launch of Meta's Llama 4 model in April - its performance was underwhelming and faced allegations of benchmark cheating - as part of the company's rationale for forming the new group. But The Register understands discussions about the creation of the group date back at least to December 2024, before the release of Llama 4. The more interesting thing to me is it feels like there's an inflection point where these models have become useful and have business value. And we've crossed that line and it's just going to flow from there We asked the researcher whom Meta approached about the plausibility of Meta's AI group pursuing superintelligence, or artificial general intelligence, the theorized point where AI models broadly outperform humans. They told us it is a reasonable issue to consider. "It's already the case that in so many dimensions, these models are superhuman, right?" the researcher said. "For example, they can defeat humans at math or Go or whatever. So it's not so crazy to me. There are always holes [in what they can do] but these holes keep disappearing as we scale and we improve the algorithms. "The more interesting thing to me is it feels like there's an inflection point where these models have become useful and have business value. And we've crossed that line and it's just going to flow from there. I think that's what's going on here." Zheng said he thinks Meta fears falling behind OpenAI, Anthropic, and Google, despite what the company has accomplished with Llama. "Their core strength has historically been in social platforms, but now they're clearly investing heavily to catch up and compete in foundation models," he said. "The recent reports around possible investment or acquisition of Scale AI also suggest they're doubling down on high-quality data, model training infrastructure, and elite AI talent." Meta is accustomed to spending large amounts of money on projects that don't immediately produce much revenue. The company's Reality Labs VR group has lost money every year since its inception in Q4 2020, totaling more than $64 billion. But given Meta earned a profit of $62 billion last year, there's clearly enough in the till to poach 50 top AI researchers at $10 million a pop, particularly after the company axed 3,600 employees in January. And if Meta's expectations about the revenue potential from AI are borne out, $500 million in compensation - a fraction of the company's AI-focused $60-$65 billion 2025 capital expenditure plan - will be a drop in the bucket. A recent legal filing [PDF] in publisher AI lawsuit Kadrey v. Meta reveals that "Meta forecasts its GenAI products will generate between $460 billion and $1.4 trillion of total revenue by 2035." ®

Meta in talks over Scale AI investment that could exceed $10 billion, Bloomberg reports

June 8 (Reuters) - Meta Platforms (META.O), opens new tab is in talks to make an investment that could exceed $10 billion in artificial intelligence startup Scale AI, Bloomberg News reported on Sunday. The terms of the deal were not yet finalized and could still change, the report said, citing people familiar with the matter. Scale AI declined to comment and Meta did not immediately respond to Reuters request for comment outside regular business hours. Founded in 2016, Scale AI is a data labeling startup backed by tech giants Nvidia (NVDA.O), opens new tab, Amazon (AMZN.O), opens new tab and Meta. Last valued at nearly $14 billion, Scale AI also provides a platform for researchers to exchange AI-related information, with contributors in more than 9,000 cities and towns. Reporting by Gursimran Kaur in Bengaluru Editing by Bernadette Baum Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Artificial Intelligence

Meta to pay nearly $15 billion for Scale AI stake, The Information reports

June 10 (Reuters) - Meta Platforms (META.O), opens new tab has agreed to take a 49% stake in artificial intelligence startup Scale AI for $14.8 billion, The Information reported on Tuesday, citing two people familiar with the matter. Founded in 2016, Scale AI provides vast amounts of labeled data or curated training data, which is crucial for developing sophisticated tools such as OpenAI's ChatGPT. The deal, which has not been finalized yet, appears to be beneficial for Scale AI's investors, including Accel, Index Ventures, Founders Fund and Greenoaks Capital, as well as its current and former employees, the report said. Meta, Scale AI and the startup's investors did not immediately respond to Reuters' requests for comment. As part of the deal, Scale AI CEO Alexandr Wang will take a top position inside Meta, leading a new "superintelligence" lab, according to the report. Meta CEO Mark Zuckerberg has been actively recruiting top AI researchers to boost the company's AI efforts, the report said. The company is fighting the perception that it may have fallen behind in the AI race after its initial set of Llama 4 large language models released in April fell short of performance expectations. Meta delayed the release of its flagship "Behemoth" AI model due to concerns about its capabilities, the Wall Street Journal reported last month. The company is also facing antitrust concerns related to its acquisitions of Instagram and WhatsApp. According to The Information report, the structure for the potential deal with Scale AI could be designed to avoid more regulatory scrutiny. Scale AI was valued at $13.8 billion in a funding round last spring. It generated about $870 million in revenue in 2024 and expects more than $2 billion this year, the report said. The company counts AI firms OpenAI and Cohere as well as tech giants Microsoft, Meta and Cisco Systems among its customers, according to its website. Reporting by Jaspreet Singh in Bengaluru; Editing by Shilpi Majumdar Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Artificial Intelligence

Meta plans to invest $15bn in Scale AI as it bids to eclipse rivals

Meta plans to invest about $15bn in data-labelling start-up Scale AI and hire the group's co-founder and top researchers, in one of the biggest deals of its kind as the Big Tech company seeks to catch up with rivals. The deal, which could be announced as soon as Wednesday, would give Meta a 49 per cent stake in Scale AI and value the start-up at roughly $28bn, according to people with knowledge of the matter. The investment in Scale and attempt to poach its top talent is part of Meta's plan to build a "superintelligence" lab that will outperform OpenAI, Anthropic and Google, which are also developing models they claim will exceed human intelligence, according to one of the people. Scale declined to comment, and Meta did not respond to a request for comment. The launch of Meta's latest large language model, Llama 4, was widely seen as a failure after it underperformed on important reasoning and coding benchmarks. Meanwhile, competitors such as Google, OpenAI and Anthropic have each unveiled a new generation of powerful "reasoning" models, which solve problems by breaking them down step by step. Meta is also facing pressure from open source competitors such as China's DeepSeek that have built powerful models for a fraction of the cost. Meta, with a market capitalisation of nearly $2tn, has invested heavily in generative AI. But progress has been halting and chief executive Mark Zuckerberg has reorganised the efforts multiple times. Meta announced in April the departure of Joelle Pineau, vice-president of AI research. Alexandr Wang, a 28-year-old paper billionaire who co-founded Scale in 2016, is set to join Meta's "superintelligence" lab, the details of which were first reported by The New York Times. Details of Meta's investment were first reported by Bloomberg and The Information. Scale's core business involves manually labelling the data that is used to train advanced AI models to ensure it is accurate. Wang has forged relationships with Silicon Valley's biggest investors and technologists, including OpenAI's Sam Altman, and has positioned Scale to serve companies developing autonomous vehicles and more recently those building generative AI models. But his talents lie in promoting the company rather than managing its staff or furthering AI research, according to multiple people who have worked with him. Jason Droege, who joined Scale from Uber Eats less than a year ago, is expected to step up from chief strategy officer to chief executive, according to a person with knowledge of the matter. The fate of Scale's remaining employees is less clear. Wang recently spoke about his desire to take Scale public, but the potential deal with Meta casts uncertainty over that goal. Scale has been attempting to broaden its revenue sources following investor concern about its concentrated services, according to one person with knowledge of the matter. The group has increasingly focused on building custom applications for enterprises and bidding for government contracts. Last year, Microsoft paid $650mn to hire Inflection boss Mustafa Suleyman and his top lieutenants, and to license the start-up's technology. Google also paid $2.7bn for a similar arrangement with Character AI. The bespoke structures used by the Big Tech groups are partly designed to avoid probes from regulators, according to people with knowledge of the deals. But both Google and Microsoft have nonetheless faced scrutiny from antitrust enforcers.

Meta finalizes investment in Scale AI, valuing startup at $29 billion

June 12 (Reuters) - Meta Platforms (META.O), opens new tab has finalized an investment in Scale AI that values the startup at over $29 billion, Scale AI said on Thursday. Scale CEO and co-founder Alexandr Wang will join Meta to work on its AI efforts, with Scale's chief strategy officer, Jason Droege, to serve as its interim CEO, Scale AI added. Two sources familiar with the matter said that Meta's investment in Scale AI is $14.3 billion. The sources said that Wang will join a new "superintelligence" unit inside Meta to achieve artificial general intelligence (AGI), a term that refers to machines that can match or surpass human capabilities. Reporting by Rishabh Jaiswal and Krystal Hu; Editing by Alan Barona Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Artificial Intelligence

Meta invests $15bn in Scale AI, doubling start-up's valuation

Meta has invested $15bn into data-labelling start-up Scale AI and hired its co-founder Alexandr Wang, as part of its bid to attract talent from rivals in a fiercely competitive market. The deal values Scale at $29bn, double its valuation last year. Scale said it would "substantially expand" its commercial relationship with Meta "to accelerate deployment of Scale's data solutions", without giving further details. Scale helps companies improve their artificial intelligence models by providing labelled training data. Scale will distribute proceeds from Meta's investment to shareholders, and Meta will own 49 per cent of Scale's equity following the transaction. Wang, who was also Scale's chief executive, will "work on Meta's AI efforts" in his new role. Meta, however, did not reveal his new job title. Wang, 28, is set to remain on the board of directors at Scale, which has named Jason Droege as chief strategy officer. Droege helped launch Uber Eats as interim CEO and joined Scale in September. "Meta's investment recognises Scale's accomplishments to date and reaffirms that our path forward -- like that of AI -- is limitless," Wang said. "I'm delighted that Jason will lead the next steps in Scale's journey." Meta's investment is the latest attempt by chief executive Mark Zuckerberg to give his $1.8tn social media company an edge in the race to develop more powerful AI models. Zuckerberg has been trying to poach top researchers and engineers from rival groups as he seeks to build out a new "superintelligence" team. The deal is one of the biggest of its kind as tech companies increasingly strike agreements to invest in start-ups while acquiring their top staff. Last year, Microsoft paid $650mn to hire Inflection boss Mustafa Suleyman and his top lieutenants, and to license the start-up's technology. Google also paid $2.7bn for a similar arrangement with Character.AI. Meta has invested heavily in generative AI, with the majority of its planned $72bn in capital expenditure this year earmarked for data centres and servers. The deal underlines the high price AI companies are willing to pay for data that can be used to train AI models. Zuckerberg pledged last year that his company's models would outstrip rivals' efforts in 2025, but Meta's most recent release, Llama 4, has underperformed on various independent reasoning and coding benchmarks. The long-term goal of researchers at Meta "has always been to reach human intelligence and go beyond it", said Yann LeCun, the company's chief AI scientist at the VivaTech conference in Paris this week. Building artificial "general" intelligence -- AI technologies that have human-level intelligence -- is a popular goal for many AI companies. An increasing number of Silicon Valley groups are also seeking to reach "superintelligence", a hypothetical scenario where AI systems surpass human intelligence. The core of Scale's business has been data-labelling, a manual process of ensuring images and text are accurately labelled and categorised before they are used to train AI models. Wang has forged relationships with Silicon Valley's biggest investors and technologists, including OpenAI's Sam Altman. Scale AI's early customers were autonomous vehicle companies but the bulk of its expected $2bn in revenues this year will come from labelling the data used to train the massive AI models built by OpenAI and others. The deal will result in a substantial payday for Scale's early venture capital investors, including Accel, Tiger Global Management and Index Ventures. Tiger's $200mn investment is worth more than $1bn at the company's new valuation, according to a person with knowledge of the matter.

Meta's Scale AI stake buyout spotlights other major deals amid regulatory risks

June 12 (Reuters) - Meta has finalized a $14.3 billion purchase of a 49% stake in data labeling startup Scale AI, according to sources familiar with the matter. Scale AI said late on Thursday that the deal would value it at $29 billion and that the startup's chief executive, Alexandr Wang, would join Meta to head a new team focused on artificial general intelligence, the latest twist in Silicon Valley's race toward the cutting-edge technology. Founded in 2004 by CEO Mark Zuckerberg and his fellow Harvard University students and originally called "TheFacebook", the company dropped "The" from its name after securing the Facebook.com domain in 2005. It rebranded as Meta Platforms in 2021. The Scale AI deal comes when Meta, which has a market value of $1.77 trillion, contends with antitrust scrutiny surrounding its acquisitions of WhatsApp and Instagram. Here are Meta's major deals over the years: Target Deal Value Announced Closed Scope WhatsApp $19 billion February 2014 October 2014 Mobile messaging platform acquired in a cash and stock deal. Scale AI $14.3 billion (sources say) June 2025 Deal could help Meta have access to the high-quality data labeling that's increasingly gaining significance. Oculus VR $2 billion March 2014 Same year Maker of virtual-reality glasses for gaming in fast-growing wearable devices space. Instagram $1 billion April 2012 Same year Mobile photo- and video-sharing platform acquired in a cash and stock deal. Kustomer $1 billion (reported by The Information) November 2020 February 2022 Customer relationship management platform, which raised $60 million in financing in 2023 amid spin-out from Meta. CTRL‑Labs Between $500 million and $1 billion (reported by CNBC) September 2019 Same year New York-based startup specializing in non-invasive neural interface technology. LiveRail $400 million to $500 million (reported by TechCrunch) July 2014 Same year San Francisco-based video and advertising company. Giphy $400 million May 2020 Unable to close Meta faced regulatory scrutiny from UK's Competition and Markets Authority. In May 2023, it decided to sell Giphy to Shutterstock for $53 million. Reporting by Jaspreet Singh in Bengaluru; additional reporting by Kanjyik Ghosh Editing by Pooja Desai and Rashmi Aich Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Artificial Intelligence

OpenAI to continue working with Scale AI after Meta deal

PARIS, June 13 (Reuters) - OpenAI plans to continue working with Scale AI after rival Meta (META.O), opens new tab on Friday agreed to take a 49% stake in the artificial intelligence startup for $14.8 billion, OpenAI's CFO Sarah Friar told the VivaTech conference in Paris. Scale AI provides vast amounts of labelled or curated training data, which is crucial for developing sophisticated tools such as OpenAI's ChatGPT. "We don't want to ice the ecosystem because acquisitions are going to happen," she said. "And if we ice each other out, I think we're actually going to slow the pace of innovation." Reporting by Supantha Mukherjee in Paris, Editing by Louise Heavens Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Artificial Intelligence

Exclusive: Google, Scale AI's largest customer, plans split after Meta deal, sources say

SAN FRANCISCO, June 13 (Reuters) - Alphabet's (GOOGL.O), opens new tab Google, the largest customer of Scale AI, plans to cut ties with Scale after news broke that rival Meta (META.O), opens new tab is taking a 49% stake in the AI data-labeling startup, five sources familiar with the matter told Reuters. Google had planned to pay Scale AI about $200 million this year for the human-labeled training data that is crucial for developing technology, including the sophisticated AI models that power Gemini, its ChatGPT competitor, one of the sources said. The search giant already held conversations with several of Scale AI's rivals this week as it seeks to shift away much of that workload, sources added. Scale's loss of significant business comes as Meta takes a big stake in the company, valuing it at $29 billion. Scale was worth $14 billion before the deal. Scale AI intends to keep its business running while its CEO, Alexandr Wang, along with a few employees, move over to Meta. Since its core business is concentrated around a few customers, it could suffer greatly if it loses key customers like Google. In a statement, a Scale AI spokesperson said its business, which spans work with major companies and governments, remains strong, as it is committed to protecting customer data. The company declined to comment on specifics with Google. Scale AI raked in $870 million in revenue in 2024, and Google spent some $150 million on Scale AI's services last year, sources said. Other major tech companies that are customers of Scale's, including Microsoft (MSFT.O), opens new tab, are also backing away. Elon Musk's xAI is also looking to exit, one of the sources said. OpenAI decided to pull back from Scale several months ago, according to sources familiar with the matter, though it spends far less money than Google. OpenAI's CFO said on Friday that the company will continue to work with Scale AI, as one of its many data vendors. Companies that compete with Meta in developing cutting-edge AI models are concerned that doing business with Scale could expose their research priorities and road map to a rival, five sources said. By contracting with Scale AI, customers often share proprietary data as well as prototype products for which Scale's workers are providing data-labeling services. With Meta now taking a 49% stake, AI companies are concerned that one of their chief rivals could gain knowledge about their business strategy and technical blueprints. Google, Microsoft and OpenAI declined to comment. xAI did not respond to a request for comment. RIVALS SEE OPENINGS The bulk of Scale AI's revenue comes from charging generative AI model makers for providing access to a network of human trainers with specialized knowledge - from historians to scientists, some with doctorate degrees. The humans annotate complex datasets that are used to "post-train" AI models, and as AI models have become smarter, the demand for the sophisticated human-provided examples has surged, and one annotation could cost as much as $100. Scale also does data-labeling for enterprises like self-driving car companies and the U.S. government, which are likely to stay, according to the sources. But its biggest money-maker is in partnering with generative AI model makers, the sources said. Google had already sought to diversify its data service providers for more than a year, three of the sources said. But Meta's moves this week have led Google to seek to move off Scale AI on all its key contracts, the sources added. Because of the way data-labeling contracts are structured, that process could happen quickly, two sources said. This will provide an opening for Scale AI's rivals to jump in. "The Meta-Scale deal marks a turning point," said Jonathan Siddharth, CEO of Turing, a Scale AI competitor. "Leading AI labs are realizing neutrality is no longer optional, it's essential." Labelbox, another competitor, will "probably generate hundreds of millions of new revenue" by the end of the year from customers fleeing Scale, its CEO, Manu Sharma, told Reuters. Handshake, a competitor focusing on building a network of PhDs and experts, saw a surge of workload from top AI labs that compete with Meta. "Our demand has tripled overnight after the news," said Garrett Lord, CEO at Handshake. Many AI labs now want to hire in-house data-labelers, which allows their data to remain secure, said Brendan Foody, CEO of Mercor, a startup that in addition to competing directly with Scale AI also builds technology around being able to recruit and vet candidates in an automated way, enabling AI labs to scale up their data labeling operations quickly. Founded in 2016, Scale AI provides vast amounts of labeled data or curated training data, which is crucial for developing sophisticated tools such as OpenAI's ChatGPT. The Meta deal will be a boon for Scale AI's investors including Accel and Index Ventures, as well as its current and former employees. As part of the deal, Scale AI's CEO, Wang, will take a top position leading Meta's AI efforts. Meta is fighting the perception that it may have fallen behind in the AI race after its initial set of Llama 4 large language models released in April fell short of performance expectations. Reporting by Anna Tong and Kenrick Cai in San Francisco and Krystal Hu in New York; editing by Kenneth Li and Matthew Lewis Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Artificial Intelligence Anna Tong Thomson Reuters Anna Tong is a correspondent for Reuters based in San Francisco, where she reports on the technology industry. She joined Reuters in 2023 after working at the San Francisco Standard as a data editor. Tong previously worked at technology startups as a product manager and at Google where she worked in user insights and helped run a call center. Tong graduated from Harvard University. Kenrick Cai Thomson Reuters Kenrick Cai is a correspondent for Reuters based in San Francisco. He covers Google, its parent company Alphabet and artificial intelligence. Cai joined Reuters in 2024. He previously worked at Forbes magazine, where he was a staff writer covering venture capital and startups. He received a Best in Business award from the Society for Advancing Business Editing and Writing in 2023. He is a graduate of Duke University. Krystal Hu Thomson Reuters Krystal reports on venture capital and startups for Reuters. She covers Silicon Valley and beyond through the lens of money and characters, with a focus on growth-stage startups, tech investments and AI. She has previously covered M&A for Reuters, breaking stories on Trump's SPAC and Elon Musk's Twitter financing. Previously, she reported on Amazon for Yahoo Finance, and her investigation of the company's retail practice was cited by lawmakers in Congress. Krystal started a career in journalism by writing about tech and politics in China. She has a master's degree from New York University, and enjoys a scoop of Matcha ice cream as much as getting a scoop at work.

Meta's $14.8 billion Scale AI deal latest test of AI partnerships

June 13 (Reuters) - Facebook owner Meta's (META.O), opens new tab $14.8 billion investment in Scale AI and hiring of the data-labeling startup's CEO will test how the Trump administration views so-called acquihire deals, which some have criticized as an attempt to evade regulatory scrutiny. The deal, announced on Thursday, was Meta's second-largest . It gives the owner of Facebook a 49% nonvoting stake in Scale AI, which uses gig workers to manually label data and includes among its customers Meta competitors Microsoft (MSFT.O), opens new tab and ChatGPT creator OpenAI. Unlike an acquisition or a transaction that would give Meta a controlling stake, the deal does not require a review by U.S. antitrust regulators. However, they could probe the deal if they believe it was structured to avoid those requirements or harm competition. The deal appeared to be structured to avoid potential pitfalls, such as cutting off competitors' access to Scale's services or giving Meta an inside view into rivals' operations - though Reuters exclusively reported on Friday that Alphabet's (GOOGL.O), opens new tab Google has decided to sever ties with Scale in light of Meta's stake, and other customers are looking at taking a step back. In a statement, a Scale AI spokesperson said its business, which spans work with major companies and governments, remains strong, as it is committed to protecting customer data. The company declined to comment on specifics with Google. Alexandr Wang, Scale's 28-year-old CEO who is coming to Meta as part of the deal, will remain on Scale's board but will have appropriate restrictions placed around his access to information, two sources familiar with the move confirmed. Large tech companies likely perceive the regulatory environment for AI partnerships as easier to navigate under President Donald Trump than under former President Joe Biden, said William Kovacic, director of the competition law center at George Washington University. Trump's antitrust enforcers have said they do not want to regulate how AI develops, but have also displayed a suspicion of large tech platforms, he added. "That would lead me to think they will keep looking carefully at what the firms do. It does not necessarily dictate that they will intervene in a way that would discourage the relationships," Kovacic said. Federal Trade Commission probes into past "aquihire" deals appear to be at a standstill. Under the Biden administration, the FTC opened inquiries into Amazon's (AMZN.O), opens new tab deal to hire top executives and researchers from AI startup Adept, and Microsoft's $650 million deal with Inflection AI. The latter allowed Microsoft to use Inflection's models and hire most of the startup's staff, including its co-founders. Amazon's deal closed without further action from the regulator, a source familiar with the matter confirmed. And, more than a year after its initial inquiry, the FTC has so far taken no enforcement action against Microsoft over Inflection, though a larger probe over practices at the software giant is ongoing. A spokesperson for the FTC declined to comment on Friday. David Olson, a professor who teaches antitrust law at Boston College Law School, said it was smart of Meta to take a minority nonvoting stake. "I think that does give them a lot of protection if someone comes after them," he said, adding that it was still possible that the FTC would want to review the agreement. The Meta deal has its skeptics. U.S. Senator Elizabeth Warren, a Democrat from Massachusetts who is probing, said Meta's investment should be scrutinized. "Meta can call this deal whatever it wants - but if it violates federal law because it unlawfully squashes competition or makes it easier for Meta to illegally dominate, antitrust enforcers should investigate and block it," she said in a statement on Friday. While Meta faces its own monopoly lawsuit by the FTC, it remains to be seen whether the agency will have any questions about its Scale investment. The U.S. Department of Justice's antitrust division, led by former JD Vance adviser Gail Slater, recently started looking into whether Google's partnership with chatbot creator Character.AI was designed to evade antitrust review, Bloomberg News reported. The DOJ is separately seeking to make Google give it advance notice of new AI investments as part of a proposal to curb the company's dominance in online search. Reporting by Jody Godoy and Milana Vinn in New York; Editing by Chris Sanders and Matthew Lewis Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Artificial IntelligenceRegulatory Oversight Jody Godoy Thomson Reuters Jody Godoy reports on tech policy and antitrust enforcement, including how regulators are responding to the rise of AI. Reach her at jody.godoy@thomsonreuters.com

Zuckerberg makes his biggest AI bet as Meta nears $14 billion stake in Scale AI, hires founder Wang

Mark Zuckerberg arrives before the inauguration of Donald Trump as the 47th president of the United States takes place inside the Capitol Rotunda of the U.S. Capitol building in Washington, D.C., Monday, Jan. 20, 2025. Mark Zuckerberg is so frustrated with Meta's standing in artificial intelligence that he's willing to spend billions of dollars to convince Scale AI CEO Alexandr Wang to join his company, people familiar with the matter told CNBC. Meta is finalizing a deal to invest $14 billion into Scale AI, according to a person familiar with the matter who asked not to be named because the terms are confidential. Bloomberg reported earlier this week that an investment could top $10 billion, and a story from The Information on Tuesday said Meta would pay close to $15 billion. As a founder of one of the most prominent AI startups, Wang has built a reputation as an ambitious leader who both understands AI's technical complexities and how to build a business that's not merely focused on research, according to two former Meta AI employees who agreed to speak on the condition of anonymity. Zuckerberg will be counting on Wang to better execute Meta's AI ambitions following the lukewarm launch of the company's latest Llama AI models. By not directly acquiring Scale AI, Meta appears to be taking a similar strategy as companies like Google and Microsoft, which have brought in prominent leaders in AI from the startups Character.AI and Inflection AI by taking large stakes in those companies rather than buying them outright. Meta is currently on trial against the Federal Trade Commission for antitrust claims, and the company doesn't want to further upset regulators by acquiring Scale AI, multiple people familiar with the matter said. As part of the deal, Meta will take a 49% stake in the data-labelling and annotation startup, The Information reported, while Wang will help lead a new AI research lab at the social networking company and will be joined by some of his colleagues. The New York Times was first to report about the new AI lab.

Scale AI plans to promote strategy chief Droege to CEO as founder Wang heads for Meta

Scale AI plans to promote Chief Strategy Officer Jason Droege to serve as its new CEO, with founder Alexandr Wang heading to Meta as part of a multibillion-dollar deal with the company, CNBC has confirmed. Meta is finalizing a $14 billion investment into artificial intelligence startup Scale AI, CNBC reported earlier this week. Wang will help lead a new AI research lab at Meta and will be joined by some of his colleagues. The New York Times was first to report about the new AI lab. Bloomberg first reported that Droege was picked to be the new CEO. CNBC confirmed Scale AI's plans with a person familiar with the matter who asked not to be named because of confidentiality. Scale AI and Droege didn't respond to CNBC's requests for comment. Droege joined Scale AI in August of 2024, according to his LinkedIn profile. Prior to his role at the startup, he served as a venture partner at Benchmark and a vice president at Uber. Founded in 2016, Scale AI has achieved a high profile in the industry by helping major tech companies like OpenAI, Google and Microsoft prepare data they use to train cutting-edge AI models. Meta has been pouring billions of dollars into AI, but CEO Mark Zuckerberg has been frustrated with its progress. Zuckerberg will be counting on Wang to better execute Meta's AI ambitions following the tepid reception of the company's latest Llama AI models. Meta will take a 49% stake in Scale AI with its investment, The Information reported.

Meta invests in AI firm Scale and recruits its CEO for 'superintelligence' team

Meta said Thursday it is making a large investment in artificial intelligence company Scale and recruiting its CEO Alexandr Wang to join a team developing "superintelligence" at the tech giant. The move reflects a push by Meta CEO Mark Zuckerberg to revive AI efforts at the parent company of Facebook and Instagram as it faces tough competition from competitors such as Google and OpenAI. Meta announced what it called a "strategic partnership and investment" with Scale late Thursday but didn't disclose the financial terms of the deal. Scale said the added investment puts its market value at over $29 billion. Scale said it will remain an independent company but the agreement will "substantially expand Scale and Meta's commercial relationship." Meta will hold a minority of Scale's outstanding equity. Wang, though joining Meta, will also remain on Scale's board of directors. Replacing him is a new interim Scale CEO Jason Droege, who was previously the company's chief strategy officer and had past jobs at Uber Eats and Axon. It won't be the first time a big tech company has gobbled up talent and products at innovative AI startups without formally acquiring them. Microsoft hired key staff from startup Inflection AI, including co-founder and CEO Mustafa Suleyman, who now runs Microsoft's AI division. Google pulled in the leaders of AI chatbot company Character.AI, while Amazon made a deal with San Francisco-based Adept that sent its CEO and key employees to the e-commerce giant. Amazon also got a license to Adept's AI systems and datasets. Wang was a 19-year-old student at the Massachusetts Institute of Technology when he and co-founder Lucy Guo started Scale in 2016. They won influential backing that summer from the startup incubator Y Combinator, which was led at the time by Sam Altman, now the CEO of OpenAI. Wang dropped out of MIT, following a trajectory similar to that of Meta CEO Mark Zuckerberg, who quit Harvard University to start Facebook more than a decade earlier. Scale's pitch was to supply the human labor needed to improve AI systems, hiring workers to draw boxes around a pedestrian or a dog in a street photo so that self-driving cars could better predict what's in front of them. General Motors and Toyota have been among Scale's customers. What Scale offered to AI developers was a more tailored version of Amazon's Mechanical Turk, which had long been a go-to service for matching freelance workers with temporary online jobs. More recently, the growing commercialization of AI large language models -- the technology behind OpenAI's ChatGPT, Google's Gemini and Meta's Llama -- brought a new market for Scale's annotation teams. The company claims to service "every leading large language model," including from Anthropic, OpenAI, Meta and Microsoft, by helping to fine tune their training data and test their performance. It's not clear what the Meta deal will mean for Scale's other customers. Wang has also sought to build close relationships with the U.S. government, winning military contracts to supply AI tools to the Pentagon and attending President Donald Trump's inauguration. The head of Trump's science and technology office, Michael Kratsios, was an executive at Scale for the four years between Trump's first and second terms. Meta has also begun providing AI services to the federal government. Meta has taken a different approach to AI than many of its rivals, releasing its flagship Llama system for free as an open-source product that enables people to use and modify some of its key components. Meta says more than a billion people use its AI products each month, but it's also widely seen as lagging behind competitors such as OpenAI and Google in encouraging consumer use of large language models, also known as LLMs. It hasn't yet released its purportedly most advanced model, Llama 4 Behemoth, despite previewing it in April as "one of the smartest LLMs in the world and our most powerful yet." Meta's chief AI scientist Yann LeCun, who in 2019 was a winner of computer science's top prize for his pioneering AI work, has expressed skepticism about the tech industry's current focus on large language models. "How do we build AI systems that understand the physical world, that have persistent memory, that can reason and can plan?" LeCun asked at a French tech conference last year. These are all characteristics of intelligent behavior that large language models "basically cannot do, or they can only do them in a very superficial, approximate way," LeCun said. Instead, he emphasized Meta's interest in "tracing a path towards human-level AI systems, or perhaps even superhuman." LeCun co-founded Meta's AI research division more than a decade ago with Rob Fergus, a fellow professor at New York University. Fergus later left for Google but returned to Meta last month after a 5-year absence to run the research lab, replacing longtime director Joelle Pineau. Fergus wrote on LinkedIn last month that Meta's commitment to long-term AI research "remains unwavering" and described the work as "building human-level experiences that transform the way we interact with technology."

Scale AI's Alexandr Wang confirms departure for Meta as part of $14.3 billion deal

Alexandr Wang, CEO of ScaleAI speaks on CNBC's Squawk Box outside the World Economic Forum in Davos, Switzerland on Jan. 23, 2025. Scale AI founder Alexandr Wang told employees in a memo on Thursday that he's leaving for Meta, confirming reports from earlier in the week about his departure and a large investment from the social networking company. Meta is pumping $14.3 billion into Scale AI as part of the deal, and will have a 49% stake in the artificial intelligence startup, but will not have any voting power, a Scale AI spokesperson said. "As you've probably gathered from recent news, opportunities of this magnitude often come at a cost," Wang wrote in the memo that he shared on X. "In this instance, that cost is my departure. It has been the absolute greatest pleasure of my life to serve as your CEO." A Meta spokesperson confirmed that the company has finalized its "strategic partnership and investment in Scale AI. "As part of this, we will deepen the work we do together producing data for AI models and Alexandr Wang will join Meta to work on our superintelligence efforts," the spokesperson said. "We will share more about this effort and the great people joining this team in the coming weeks." Meta's big bet on Wang fits into CEO Mark Zuckerberg's plans to bolster his company's AI efforts amid fierce competition from OpenAI and Google-parent Alphabet. Zuckerberg has made AI his company's top priority for 2025, but has grown increasingly frustrated with his team, particularly as Meta's latest version of its flagship Llama AI models received a tepid response from developers, CNBC reported earlier this week. Although Zuckerberg has traditionally placed long-standing employees into high-ranking position, he decided that the outsider Wang would be better suited to oversee AI initiatives deemed crucial for the company. Scale AI counts a number of Meta rivals as customers, including Google, Microsoft and OpenAI. Meta is one of Scale AI's biggest clients. The Scale AI spokesperson said that Meta's investment and hiring of Wang will not impact the startup's customers, and that Meta will not be privy to any of its business information or data.

Meta invests $14.8 billion in Scale AI and recruits its CEO

Alexandr Wang will reportedly lead Meta's 'AI Superintelligence' team. Meta has finalized its $14.3 billion investment in Scale AI, which now values the startup that provides other companies with data labeling and model evaluation services for AI training at $29 billion. As part of the deal, Scale AI's founder and CEO Alexandr Wang will be joining Meta. According to The New York Times, Wang will lead Meta's fledgling "Superintelligence lab." A few days ago, several reports came out that Meta chief Mark Zuckerberg has been personally overseeing the recruitment for a team he's assembling to achieve AI superintelligence. Zuckerberg, who was reportedly frustrated by the quality of Meta's Llama 4 LLM, has been inviting potential recruits to his home and offering them compensation packages worth seven to nine figures. Wang said in his note to Scale employees that he's taking a few other people from the startup with him to Meta to work on artificial intelligence. Meta has yet to formally announce the team and to reveal what their role will be, but their ultimate goal based on the name "Superintelligence lab" is to develop AI with intellectual powers far beyond any human's. This investment is Meta's second largest after its $19 billion Whatsapp acquisition. With its $14.3 billion investment, Meta will have a 49 percent stake on Scale but will have little control over its operations. The Times said the companies decided on that structure to avoid being scrutinized by regulators. Both Amazon's $4 billion investment in Anthropic and Microsoft's close ties to OpenAI were probed by regulators, after all. Meta itself is still battling the FTC in an antitrust case over its acquisitions of Instagram and WhatsApp. In his note to employees, Wang wrote that "opportunities of this magnitude," pertaining to Meta's investment, "come at a cost." That cost, he said, was his departure. Wang will still serve on Scale's Board of Directors, but his position as CEO will be taken over by Jason Droege, the startup's current Chief Strategy Officer.

Meta in Talks to Invest in Scale AI

Meta, which owns Facebook and Instagram, is in advanced talks to invest billions of dollars in Scale AI, a start-up focused on data used by artificial intelligence companies, according to two people with knowledge of the matter. The potential investment is a sign that large tech companies remain interested in start-ups focused on A.I. amid a heated contest to be a leader in the technology. If an investment happens, it will be an outlier for Meta, which typically does not invest in outside companies. Meta and Scale declined to comment. Bloomberg reported earlier on the talks. Mark Zuckerberg, Meta's chief executive, has pushed heavily into A.I. in recent years. Since OpenAI released its ChatGPT chatbot in late 2022, Mr. Zuckerberg has leaned into incorporating A.I. across Meta's products, including in smart glasses and a recently released app, Meta AI. Founded in San Francisco by Alexandr Wang and Lucy Guo in 2016, Scale AI built a business with armies of contract workers who sift through vast amounts of data, labeling and "cleaning" the information to make it easier to use to train A.I. systems. Scale sells its services to companies like Microsoft, Cohere, Etsy and OpenAI. Scale AI has raised more than $1 billion from a mix of investors, including the venture capital firms Index Ventures and Founders Fund. More recently, Scale AI has worked to build its enterprise and public sector businesses, dispatching consultants and engineers to work with companies and governments to help build programs that use A.I. In recent years, Meta has encouraged programmers to use its freely available open source A.I. models to build A.I. apps across the private and public sectors. In November, Meta announced that it would allow U.S. government agencies and contractors working on national security to use its A.I. models for military purposes, a shift from its previous policy. The company teamed up with the defense contractors Booz Allen and Lockheed Martin on the initiatives, along with start-ups including Scale.

Meta Invests Nearly $15 Billion in Scale AI to Kick-Start Superintelligence Lab

The DealBook Newsletter Our columnist Andrew Ross Sorkin and his Times colleagues help you make sense of major business and policy headlines -- and the power-brokers who shape them. Get it sent to your inbox. Meta said on Thursday that it planned to invest nearly $15 billion in Scale AI, a start-up that works with data to train artificial intelligence systems, in a deal that Meta hopes will add needed muscle to its disappointing A.I. division. As a condition of the deal, Alexandr Wang, Scale AI's 28-year-old chief executive, plans to join Meta in a top leadership role in the new division, which Meta is calling its Superintelligence lab. Mr. Wang, whom people inside Meta have taken to calling a visionary leader, will also bring a team of employees from Scale AI to work at Meta. The move to invest billions in Scale AI, an amount equal to about 10 percent of Meta's revenue in 2024, would be Meta's first major minority investment in an outside company. It is Meta's second-largest deal, after the $19 billion acquisition of the messaging app WhatsApp about 11 years ago. Meta is scrambling to catch up with A.I. competitors such as Google, Microsoft, OpenAI and Anthropic, as industry executives jockey for an edge in what they believe will be the most transformative technology in a generation. "Meta has finalized our strategic partnership and investment in Scale AI," a spokesperson for Meta said in a statement. "As part of this, we will deepen the work we do together producing data for A.I. models, and Alexandr Wang will join Meta to work on our superintelligence efforts." Meta's investment with Scale AI is unusually structured. Meta will take a minority stake in the start-up and receive little control over its direction. The structure was intentional. Executives at Meta and Scale AI were worried about drawing the attention of regulators. Meta is waiting on a federal judge's decision in an antitrust case scrutinizing its earlier acquisitions of Instagram and WhatsApp. The Federal Trade Commission under President Joseph R. Biden Jr. was skeptical of big technology acquisitions, and Lina Khan, who led the agency at the time, scrutinized multibillion-dollar investments in A.I. companies. The structure of those deals -- which included Amazon's investments in Anthropic and Microsoft's backing of OpenAI -- allowed the big companies to form close ties with smaller rivals while dodging regulatory issues. It is unclear if the F.T.C. under its new chairman, Andrew Ferguson, will continue down that path. But Mr. Ferguson has shown few signs of changing course. OpenAI kicked off the A.I. movement in late 2022 with the release of its chatbot ChatGPT, compelling companies like Google and Meta to build similar technologies. Meta found an important niche when it chose to open source its systems, freely sharing the underlying tech with developers and businesses. But its latest system, called LLAMA4, has not matched the technologies produced by its biggest rivals. Among technologists, superintelligence is a futuristic goal of A.I. development. OpenAI, Google and others have said their immediate aim is to build artificial general intelligence, or A.G.I., a machine that can do anything the human brain can do. Superintelligence, if it can be developed, would go beyond A.G.I.

Meta Is Building a Superintelligence Lab. What Is That?

The DealBook Newsletter Our columnist Andrew Ross Sorkin and his Times colleagues help you make sense of major business and policy headlines -- and the power-brokers who shape them. Get it sent to your inbox. On Thursday, Meta unveiled a $14.3 billion investment and partnership that will be the core of a new artificial intelligence research lab dedicated to the pursuit of "superintelligence," a swing-for-the-fences effort in the global technology race. The new lab will be led by Alexandr Wang, a co-founder and the chief executive of Scale AI. Meta invested in his start-up as part of an agreement to bring Mr. Wang to the company. Meta, which owns Facebook, Instagram and WhatsApp, has been offering compensation packages as high as $100 million to leading researchers across the field in an effort to staff the new lab, according to four people familiar with the effort. News of the lab has left many people asking what exactly a superintelligence lab is meant to do. Here is a guide. What is superintelligence? Companies like OpenAI and Google want to build "artificial general intelligence," or A.G.I., which is a way to describe a machine that can do anything the human brain can do. It is an ambitious goal with no clear path to success. Many tech leaders say a breakthrough is not far away, but it's hard to know what that means because A.G.I. is so loosely defined. As a result, Silicon Valley leaders are now talking about building superintelligence, which would be even more powerful than A.G.I. It, too, is a loosely defined term, but generally refers to a machine that is more powerful than the human brain. Has anyone else built a superintelligence lab? Ilya Sutskever, the former chief scientist at OpenAI, has co-founded a company called Safe Superintelligence. It has no plans to release products. Its stated mission is to privately build superintelligence and release the technology when it has been proved to be completely safe. Dr. Sutskever is among those who believe that powerful A.I. could harm humanity. Are we on the verge of A.G.I.? No one really knows when or even if A.G.I. will happen, but many are saying they are getting close to it. OpenAI's chief executive, Sam Altman, told President Trump that it would happen before the end of his term. Dario Amodei, the chief executive of Anthropic, an OpenAI rival, said it would happen within one to two years. But there is no hard evidence. Measuring intelligence is also notoriously difficult. We can't even agree on how to measure the intelligence of humans -- much less compare humans and machines. Then why do people say A.G.I. is close? As companies like OpenAI fed more and more data into their systems, they improved at a steady rate. Some technologists believe the progress will continue at much the same rate -- to A.G.I. and beyond. But is that true? Maybe. In recent months, companies used up just about all the English language text on the internet as they improved these systems. So they turned to a new method where their systems learn by trial and error -- a process called reinforcement learning. Technologists are divided on whether this technique will lead to A.G.I. A recent paper from Apple -- which followed a similar paper from researchers at Arizona State University -- shows that the latest A.I. systems could become less accurate as they work through the multiple steps of problem solving. It was an indication that the metronomic improvement that the tech industry has grown accustomed to may be slowing. "These are great tools," said Subbarao Kambhampati, a professor and A.I. researcher at Arizona State, who was an author of the report. "But I don't believe we are anywhere near A.G.I. or superintelligence. With these tools, you always need a human in the loop." Didn't Meta already have an A.I. lab? Yes. Meta built its first artificial intelligence in 2013, when the A.I. race was in its infancy. That fall, both Google and Meta (then called Facebook) were fighting to acquire an important A.I. start-up, DeepMind. Google prevailed, and DeepMind now forms the core of Google's A.I. efforts. So Meta's chief executive, Mark Zuckerberg, decided to build his own lab. To run the lab, he tapped Yann LeCun, a pioneer in neural networks who was a professor at New York University. What is a neural network? A neural network, the fundamental building block of technology such as OpenAI's ChatGPT, is a mathematical system that can learn skills by analyzing enormous amounts of digital data. By identifying patterns in thousands of cat photos, for instance, it can learn to identify a cat. In 2013, neural networks were getting very good at recognizing both sounds and images, allowing a digital assistant like Siri to recognize words and driverless cars to recognize pedestrians and street signs. That technology eventually led to today's chatbots. Does Meta have its own chatbot? Yes. It's called Meta AI. Because of its long history in A.I., the company responded quickly to the arrival of ChatGPT. It created a new generative A.I. that pushed similar technologies across many of its online services. Meta accelerated the development of A.I. across the industry by open sourcing its key technologies, meaning it freely shared the underlying computer code with outside software developers and businesses. Though this is a common practice in the tech industry, many of the leading A.I. companies were reluctant to open source their most powerful technologies. Meta was not. So why is Meta building a new A.I. lab? The company's latest technology, Llama 4, did not live up to expectations. It was not as powerful as rival systems from the likes of OpenAI and Google. Meta has also been grappling with employee churn and management issues related to the technology, according to two of people familiar with the company's struggles. Does that really warrant a new lab? Mr. Zuckerberg is an ambitious person. And he is worried about falling behind the other industry giants. The new lab is an effort to attract a stable of talented researchers. Meta has been making stunning offers to researchers, in some cases promising compensation packages as high as $100 million. But Meta may need more than just money to woo top talent. The leading researchers already make millions of dollars a year and want to work on the most ambitious projects. That is why Meta is using the superintelligence label. "Where these terminologies come from is anyone's guess," Dr. Kambhampati said. "These terms have become a commercial thing, a branding thing, an advertising thing, rather than a technical thing."

Meta invests $14.8 billion in Scale AI to accelerate superintelligence ambitions

Editor's take: Big tech companies are locked in a fierce race to develop artificial intelligence that matches or exceeds human intelligence - a breakthrough with the power to transform industries and society. Meta's new partnership with Scale AI underscores just how urgent and high-stakes this competition has become, as the company commits to unprecedented investments to keep pace. Insider sources told The Information that Meta is making a bold move to reshape its artificial intelligence ambitions by investing $14.8 billion for a 49 percent stake in Scale AI, a San Francisco - based data labeling firm. Although the companies have yet to finalize the deal, it ranks among the largest external investments in Meta's history and signals a dramatic shift in the company's strategy as it aims to regain ground in the rapidly evolving AI sector. Meta structured the deal so its cash goes to Scale AI's existing shareholders, including principal venture capital backers and employees. Meanwhile, Scale AI CEO Alexandr Wang will take on a senior executive role at Meta, leading a newly formed research lab focused on "superintelligence" - an advanced form of artificial intelligence that aims to surpass human cognitive abilities. Several Scale AI employees will join Meta as part of this initiative, designed to accelerate the company's AI development after a series of recent setbacks. Alexandr Wang, center, will hold a senior executive role at Meta. Meta CEO Mark Zuckerberg has reportedly taken a hands-on approach to the company's AI pivot, personally reaching out to researchers and spearheading recruitment of the new superintelligence team. The company plans to hire around 50 experts for the group, reflecting Zuckerberg's determination to reposition Meta at the forefront of artificial general intelligence. The effort follows the underwhelming rollout of Meta's recent AI models, including the latest version of its Llama language model, which faced delays and fell short of expectations - frustrating senior leadership and sparking internal talks of management shakeups. Unlike other artificial intelligence startups developing large language models, Scale AI focuses on delivering the massive, high-quality labeled datasets essential for training advanced systems. The company operates a global network of more than 100,000 contractors who annotate images, write text, and generate training material for clients that include OpenAI, Google, and Meta. In recent years, Scale AI has expanded into software tools that help businesses build AI solutions, but data labeling remains its core business. Meta's investment in Scale AI reflects a broader trend among tech giants increasingly acquiring minority stakes in promising startups to secure talent and technology while avoiding heightened antitrust scrutiny. Microsoft, Amazon, and Google made similar moves last year, but Meta's partnership with Scale AI stands out for its focus on data infrastructure rather than model development. People familiar with the deal told The Wall Street Journal that Meta would receive nonvoting shares in Scale AI, with a provision allowing those shares to convert into voting stock - potentially giving Alexandr Wang control. Part of the investment will go directly to existing shareholders, who will retain their current stakes in the company.

Meta takes $15 billion stake in Scale AI in bid to catch competitors

The deal, which could be announced as soon as Wednesday, will give Meta 49 percent stake in the AI startup. Meta has agreed to pay $14.8 billion for a 49 percent stake in the AI data firm Scale AI in one of the biggest acquisitions the social media giant has made since its 2014 deal to buy WhatsApp, according to a person familiar with the matter. The arrangement with Scale AI, which could be announced as soon as Wednesday, will give the start-up's CEO, Alexandr Wang, a senior position at Meta leading a team focused on developing super intelligence, said the person, who spoke on the condition of anonymity to discuss private company matters. Super intelligence describes a hypothetical technology that could perform better than humans at all tasks. Meta, which is an existing Scale AI customer, is expected to expand its use of the company's data-labeling services, the person said. The deal was reported earlier by the Information. The New York Times and Bloomberg News earlier reported Meta's decision to create a new AI lab. Meta and Scale AI declined to comment. The deal will give Meta more access to Scale AI's services, which have shifted over the years. The company first specialized in connecting large tech companies with human contractors to label the massive amounts of data necessary to train AI models, focusing on self-driving vehicles and relying on "digital sweatshops" in areas such as the Philippines. As the technology progressed to require little labeling, Scale pivoted to the types of contractors and data required for later stages of AI development, including making chatbots sound more human or helping them improve in specific categories such as health care or defense. Outlier AI, a platform Scale uses to hire contractors, on Tuesday advertised 28 roles, mostly for specialized human trainers focusing on subject areas such as advanced biology, chemistry, and physics, and for a number of voice-training roles in languages including Chinese and Arabic. Meta's acquisition could face scrutiny from antitrust regulators in the Trump administration who, while cautious about regulating AI, have expressed skepticism about the power and effect of big technology companies, including Meta, said William Kovacic, a former Federal Trade Commission chair and a law professor at George Washington University. The FTC earlier this year opted not to drop its lawsuit challenging Meta's acquisitions of Instagram and WhatsApp, even after Meta CEO Mark Zuckerberg lobbied the White House for a resolution. Earlier this month, panelists at an FTC event called for a bevy of stiff regulatory reforms to help make the internet safer for kids and teens. But FTC Chair Andrew Ferguson said in September that "AI may pose a much-needed competitive and innovative challenge to incumbent Big Tech firms." "A knee-jerk regulatory response will only squelch innovation, further entrench Big Tech incumbents, and ensure that AI innovators move to jurisdictions friendlier to them -- but perhaps hostile to the United States," he added. Kovacic said if antitrust regulators examine Meta's acquisition, they would have to determine whether the company could be considered a dominant player in the AI field to take action. "My sense of looking at the commentary from the business community is that Meta is not the leader in the development of artificial general intelligence -- that it is trailing the field," he said. Meta's alliance with Wang is the latest in a flurry of personnel changes as the social media giant attempts to compete with tech firms that have a stronger reputation in generative AI, such as OpenAI, Anthropic, Google, Microsoft and China-based DeepSeek. Meta CEO Mark Zuckerberg has said he expects that Meta's AI chatbot will become the leading AI assistant, besting rivals such as ChatGPT and Claude. Meta earned a lot of goodwill from industry insiders when its popular AI model, called Llama, launched in 2023, earning points for its relative openness as OpenAI and Google began to publish fewer papers and reveal less about how their technology was developed. But in recent months, Meta has faced public stumbles. In April, Meta was caught trying to manipulate a platform for evaluating AI models called LMArena. And last month, Meta said it would delay the rollout of its gargantuan AI model called Behemoth, according to a report in the Wall Street Journal. Meanwhile, Meta's recently launched AI app, which Zuckerberg touted in podcast appearances, seems to have fallen flat with consumers. It is ranked #17 in the productivity category on Apple's App Store and has fewer than 10 million downloads on the Google Play store. In April, Joelle Pineau, who had worked at the company for eight years, announced she was leaving her post leading Meta's AI research lab. During her tenure, Meta made significant moves to reshape the once independent artificial-research lab to be more aligned with the company's business and product priorities. The following month, Meta reorganized its generative artificial intelligence team, splitting the department into two groups focused on AI research and consumer products, according to an internal memo about the plans seen by The Washington Post. "I believe this structure will be a major upgrade to overcome the biggest challenges that I've heard from many of you, and will help accelerate our overall progress," Meta chief product officer Chris Cox wrote.

Meta joins the rush for superintelligence

To catch up, Zuckerberg is prepared to open up his significant wallet to hire -- or acqui-hire -- the talent he needs. Zoom in: Scale itself would likely continue its current work, albeit without Wang and some other top talent. Between the lines: Meta is hoping to woo leading AI researchers by making the case that it has the resources and ongoing business to fund such a lofty ambition. Yes, but: The company has reportedly struggled with performance in its most recent large models and has also seen some top researchers head for the exits, including AI research head Joelle Pineau, announced in April that she was leaving the company. The big picture: A Meta-Scale AI deal would follow a growing trend: tech giants buying parts of promising AI startups to secure key talent or intellectual property, without acquiring the full company. Zoom out: Meanwhile, the march to superintelligence continues at breakneck speed, fueled by giant investments in computing power and data centers. What we're watching: What happens to Scale AI is particularly interesting given its role providing data labeling services to a host of companies including Google, OpenAI, Anthropic and Meta itself.

Meta takes $15 billion stake in Scale AI

Meta has finalized a deal to pay around $15 billion for a 49% stake in Scale AI, a company best known for providing the human labor needed to label data used in the creation of AI models, sources told Axios. Why it matters: The deal will help transform Meta's AI efforts, but also raises big questions for the future of a data-labeling company widely used by all the major AI players, including Google and OpenAI. What they're saying: "Meta has finalized our strategic partnership and investment in Scale AI," a Meta spokesperson said. The big picture: Big Tech is slicing off people, patents and other parts of AI startups, without buying them whole. This is a breaking news story.

Meta to announce $15bn investment in bid to achieve computerised 'superintelligence'

Mark Zuckerberg expected to announce Meta will buy 49% stake in Scale AI as race to dominate AI market speeds up Meta is to announce a $15bn bid to achieve computerised "superintelligence", according to multiple reports. The Silicon Valley race to dominate artificial intelligence is speeding up despite the patchy performance of many existing AI systems. Mark Zuckerberg, Meta's chief executive, is expected to announce the company will buy a 49% stake in Scale AI, a start-up led by Alexandr Wang and co-founded by Lucy Guo, in a move described by one Silicon Valley analyst as the action of "a wartime CEO". Superintelligence is described as a type of AI that can perform better than humans at all tasks. Currently AI cannot reach the same level as humans in all tasks, a state known as artificial general intelligence (AGI).. Recent studies have shown that many mainstream systems collapse when presented with highly complex puzzles. Meta's attempt to leapfrog the current state of progress and target superintelligence is seen by observers as an attempt by the company to regain the initiative over AI after significant advances by competitors including Sam Altman's Open AI and Google and after Meta's huge investment in the concept of the Metaverse flopped.. In March, Wang, 28, signed a deal to build a US defence department system called Thunderforge to apply AI to US military planning and operations, starting with the Indo-Pacific and European commands. The company also received early investment from Peter Thiel's Founders Fund. The move by Meta has led to fresh calls for European governments to launch their own more transparent research push that would ensure that the technology was developed robustly while maintaining public trust - an AI equivalent of the Cern European Organization for Nuclear Research in Switzerland. Michael Wooldridge, a professor of the foundations of artificial intelligence at the University of Oxford, said: "There's a good argument that there should be a Cern for AI where governments collaborate to develop AI openly and robustly so we understand and trust the technology we are developing. That's not going to happen if it's developed behind closed doors. [AI] seems just as important as Cern and particle accelerators." Wooldridge said the reported deal "seems very much like an attempt by Meta to regain the initiative after the Metaverse didn't take off. They invested spectacular amounts in that and it didn't just fail, it was ridiculed." But he said the state of AI development was patchy and that AGI is still far away, never mind "superintelligence". "We have AI that can do genuinely impressive things but then it fails on an absolutely simple task which any competent GCSE student wouldn't fail," he said. Dr Andrew Rogoyski, the director of partnerships and innovation at the Institute for People-Centred AI at Surrey University, said the deal would be "a reflection that the AI companies are hoovering up AI talent from wherever they can get it, whether acquiring young AI companies, or hollowing out university AI departments". He said that Meta's strategy for AI was different from the likes of OpenAI and Anthropic in that AI is an enabler for Meta's business rather than its core purpose. "It means they're not quite as desperate to achieve AGI, so they can afford to take a longer view," he said. It was reported that Wang will take a senior position in Meta. Meta declined to comment. Scale AI has been contacted for comment.

Meta's $15 Billion Scale Deal Could Leave Gig Workers Behind

Meta is reportedly set to invest $15 billion to acquire a 49% stake in Scale AI, in a deal that would make Scale CEO Alexandr Wang head of the tech giant's new AI unit dedicated to pursuing "superintelligence." Scale AI, founded in 2016, is a leading data annotation firm that hires workers around the world to label or create the data that is used to train AI systems. The deal is expected to greatly enrich Wang and many of his colleagues with equity in Scale AI; Wang, already a billionaire, would see his wealth grow even further. For Meta, it would breathe new life into the company's flagging attempts to compete at the "frontier" of AI against OpenAI, Google, and Anthropic.

Meta makes major investment in Scale AI, takes in CEO

Scale AI announced a major new investment by Meta late Thursday that values the startup at more than $29 billion and puts its founder to work for the tech titan. Company founder and chief executive Alexandr Wang will join Meta to help with the tech giant's own artificial intelligence efforts as part of the deal, according to the startup. Meta was reportedly pouring more than $10 billion into San Francisco-based Scale AI, and acquires its 28-year-old CEO amid fierce competition in the AI race with rivals such as OpenAI, Google and Microsoft. "Meta has finalized our strategic partnership and investment in Scale AI," a Meta spokesperson said in response to an AFP inquiry. "As part of this, we will deepen the work we do together producing data for AI models and Alexandr Wang will join Meta to work on our superintelligence efforts." Meta promised more details about the move in coming weeks. Scale AI works with business, governments and labs to exploit the benefits of artificial intelligence, according to the startup. "Meta's investment recognizes Scale's accomplishments to date and reaffirms that our path forward -- like that of AI -- is limitless," Wang said in a release. "Scale bridges the gap between human values and technology to help our customers realize AI's full potential." Since Wang founded Scale AI in 2016, it has grown to more than 1,500 people, he wrote in a post on X. He said a few other employees, whom he referred to as "Scaliens," will go with him to work on Meta's AI initiative. Wang described his departure as "bittersweet," adding he will remain a member of the Scale AI board of directors. Military AI Along with work that includes AI data, agents, and optimizing systems, Scale AI late last year announced an artificial intelligence model built on Meta's Llama 3 model that is customized for US national security missions including planning military or intelligence operations and understanding adversary vulnerabilities. Listed capabilities of "Defense Llama" include assessing scenarios and answering tactical questions such as how enemies might attack and how to effectively counter, according to Scale AI. "Scale AI is committed to ongoing collaboration with the defense community to ensure Defense Llama remains a trusted and effective asset for US military and intelligence operations," Wang said at the time. Scale AI will use the infusion of capital to accelerate innovation and strengthen partnerships, along with distributing proceeds to equity holders, according to the startup. Meta will hold a minority stake in Scale AI after the investment deal closes, but an exact figure was not revealed. Tech industry veteran and investor Jason Droege, a co-founder of Uber Eats food delivery platform, will take over as chief of Scale AI, according to the company. "Scale has led the charge in accelerating AI development," Droege said in a release. "We have built the strongest foundation to tackle AI's data challenges and push the boundaries of what's possible." Meta chief Mark Zuckerberg recently touted his tech firm's generative artificial intelligence (Gen AI) assistant, telling shareholders it is used by a billion people each month across its platforms.

Zuckerberg's Meta Just Made a Huge Investment in Very Dark AI Company

Meta's AI development isn't going quite as well as billionaire CEO Mark Zuckerberg had hoped. Once a frontrunner in the AI race, a year's worth of technical failures and setbacks to his company's "state-of-the-art" Llama 4 Behemoth have spurred Zuckerberg to pull out all the stops. Now, the second richest man on the planet is said to be handpicking a team of some 50 AI researchers for a shadowy "superintelligence group." To do so, he's set aside some $15 billion for a 49 percent stake in Scale.ai -- the despotic AI startup that's been accused of using wage-slave labor to train chatbots, commiting systemic wage theft, and is contracted to run the Pentagon's "flagship" weapons automation program. Zuckerberg's goal, according to the New York Times, is to be the first to develop the first AI system that exceeds the abilities of the human brain -- a dream, it's worth noting, which the majority of AI researchers still think is "very unlikely." Scale.ai is probably the biggest player in the data labeling game, hiring third world laborers to do the laborious task of writing, scraping, and cataloguing data for companies to train their AI systems. It'll be in good company at Zuckerberg's operation; Meta was recently caught scraping over seven million copyrighted books to feed Llama, leading to a major class action lawsuit. "This is like the AI equivalent of the Marshall Plan," wrote tech critic Ed Zitron, referring to the post-WWII scheme that made the US the global dynasty it is today. "[Meta's] running out of training data (if they haven't already) and all they have left is one company that generates it using sweat shop labor. Gotta wonder why this much money too." Per Bloomberg, the "superintelligence" initiative is Meta's largest external investment to date. As part of the investment, Scale.ai co-founder Alexandr Wang is set to join Zuckerberg's secret society of AI developers. The Meta CEO even rearranged the desks so that his new team could "sit near him," according to reporting. As part of his shadow cabal recruitment drive, Zuckerberg highlighted Meta's ad-based revenue stream, suggesting that AI developers would be free from investor scrutiny if they came to work for him, according to Bloomberg. The CEO also stressed that he had enough cash tucked away to erect a "multi-gigawatt data center," which if ever realized be among the most powerful in the world. (For context, it currently costs about $30 billion for a one-gigawatt data center, which is about the amount it takes to power 750,000 homes.) It's not currently known who else will be joining Meta's AI scrum -- though the company is reportedly offering potential recruits anywhere from seven to nine figures to join. If Wang is any indication, Zuckerberg's desk is sure to be flanked by a league of headline-grabbing tech personalities. Breathlessly described as the "world's youngest self-made billionaire" -- as if any billionaire is self-made -- Wang has become a darling of the US defense industry as of late. A notorious China hawk, Wang's cozy deals with the Pentagon come alongside drastic escalations in anti-China rhetoric, declaring an all-out "AI war" with the nation. He'll be a major asset for Zuckerberg, whose own collaboration with the US military apparatus are well known, and ramping up in recent months. The tech billionaire has previously given the federal government carte blanche to spy on US citizens through data scraped from Facebook. He eventually went on to become an outspoken champion of free speech, even as he helped build a "clean" global internet closed off to Chinese nationals. Even if his "superintelligence" scheme doesn't work out -- remember the metaverse, a scheme he was so obsessed with that he renamed the entire company? -- Zuckerberg should have more than enough dough serving up brainrot to the elderly. There's always money in the banana stand.

Meta Invests $14 Billion in Scale AI to 'Deepen' its Work on Superintelligence - Decrypt

The investment illustrates Meta's aggressive strategy to compete with the likes of OpenAI and Google. American multinational tech company Meta has made a significant investment in Scale AI, the data-labeling startup essential for training artificial intelligence systems, recruiting its young founder Alexandr Wang to build out a "superintelligence" lab focused on achieving artificial general intelligence (AGI). The $14.3 billion investment acquired a 49% stake in Scale AI, raising its valuation to over $29 billion. This is Meta's second-largest investment, following its $19 billion WhatsApp acquisition in 2014. Scale AI announced that Wang would continue to serve as a director on the company's Board of Directors, with the firm's Chief Strategy Officer, Jason Droege, stepping into his shoes as interim CEO. In a tweet, Wang shared a note to employees, describing Meta's investment as a "major milestone and a powerful validation of the hard work you've all put into Scale's mission." For Meta, which has been working on its own AI strategies and recently released a new model and a standalone AI app in the past couple of months, the deal would "deepen the work" it has been engaged in for "producing data for A.I. models," according to company statements shared with media. This speaks to the urgency of Meta's move to catch up in the AI race, as it faces mounting pressure from other players working on "frontier models" which are advanced, large-scale systems pushing the boundaries of AI. Yet the move also highlights a key tension between large tech firms such as Meta and others building on decentralized platforms, according to Renz Chong, CEO of a16z-backed modular on-chain platform Sovrun. "Earlier this year, we saw the rise of open-source frontier models that can go toe-to-toe with closed models from Big Tech," Chong told Decrypt. "That's a clear signal: 'state-of-the-art' no longer has to mean centralized or proprietary." Because most other AI-on-chain projects still lean on "centralized inference endpoints or off-chain APIs," the predicament places pressure on decentralized players. "Early infrastructure players are laying critical groundwork, offering decentralized compute and incentivized training layers," Chong noted. Scale AI specializes in data labeling services that are essential for training AI systems, working with clients including Google and OpenAI. The startup employs human annotators to classify data that fuels AI models, with much of the work conducted outside the U.S. through labor-intensive processes. Meta's investment would reportedly give it a minority stake in Scale AI, allowing the startup to maintain operational independence -- a structure that could help Meta avoid additional regulatory scrutiny amid ongoing antitrust battles. Earlier in April, Meta was accused of assisting China's AI ambitions, prompting a Senate inquiry. Still, the consolidation of AI resources between tech giants has prompted alternative visions from the decentralized sector. Sovrun, for instance, recently entered a joint venture with Virtuals Protocol to build ReadyGamer, a platform that integrates AI-driven NPCs into popular game worlds. While those projects experienced a decline in revenue earlier this year, a resurgence is underway, with daily numbers slowly returning to previous levels, according to data maintained by Virtuals Protocol. Chong argues the real shift may be found not just in making better systems, but in "changing who gets to shape them" and building "outcomes that matter to the communities they serve."

Meta makes major investment in Scale AI, takes in CEO

San Francisco (United States) (AFP) - Scale AI announced a major new investment by Meta late Thursday that values the startup at more than $29 billion and puts its founder to work for the tech titan. Company founder and chief executive Alexandr Wang will join Meta to help with the tech giant's own artificial intelligence efforts as part of the deal, according to the startup. Meta was reportedly pouring more than $10 billion into San Francisco-based Scale AI, and acquires its 28-year-old CEO amid fierce competition in the AI race with rivals such as OpenAI, Google and Microsoft. "Meta has finalized our strategic partnership and investment in Scale AI," a Meta spokesperson said in response to an AFP inquiry. "As part of this, we will deepen the work we do together producing data for AI models and Alexandr Wang will join Meta to work on our superintelligence efforts." Meta promised more details about the move in coming weeks. Scale AI works with business, governments and labs to exploit the benefits of artificial intelligence, according to the startup. "Meta's investment recognizes Scale's accomplishments to date and reaffirms that our path forward -- like that of AI -- is limitless," Wang said in a release. "Scale bridges the gap between human values and technology to help our customers realize AI's full potential." Since Wang founded Scale AI in 2016, it has grown to more than 1,500 people, he wrote in a post on X. He said a few other employees, whom he referred to as "Scaliens," will go with him to work on Meta's AI initiative. Wang described his departure as "bittersweet," adding he will remain a member of the Scale AI board of directors. Military AI Along with work that includes AI data, agents, and optimizing systems, Scale AI late last year announced an artificial intelligence model built on Meta's Llama 3 model that is customized for US national security missions including planning military or intelligence operations and understanding adversary vulnerabilities. Listed capabilities of "Defense Llama" include assessing scenarios and answering tactical questions such as how enemies might attack and how to effectively counter, according to Scale AI. "Scale AI is committed to ongoing collaboration with the defense community to ensure Defense Llama remains a trusted and effective asset for US military and intelligence operations," Wang said at the time. Scale AI will use the infusion of capital to accelerate innovation and strengthen partnerships, along with distributing proceeds to equity holders, according to the startup. Meta will hold a minority stake in Scale AI after the investment deal closes, but an exact figure was not revealed. Tech industry veteran and investor Jason Droege, a co-founder of Uber Eats food delivery platform, will take over as chief of Scale AI, according to the company. "Scale has led the charge in accelerating AI development," Droege said in a release. "We have built the strongest foundation to tackle AI's data challenges and push the boundaries of what's possible." Meta chief Mark Zuckerberg recently touted his tech firm's generative artificial intelligence (Gen AI) assistant, telling shareholders it is used by a billion people each month across its platforms.

Meta bets big on start-up AI Scale and hires its co-founder

Scale AI has helped major tech companies such as OpenAI, Google, and Microsoft prepare the data they use to train AI models. Meta is making a $14.3 billion (€12.4 billion) investment in artificial intelligence (AI) company Scale and recruiting its CEO Alexandr Wang to join a team developing "superintelligence" at the tech giant. The deal announced Thursday reflects a push by Meta CEO Mark Zuckerberg to revive AI efforts at the parent company of Facebook and Instagram as it faces tough competition from rivals such as Google and OpenAI. Meta announced what it called a "strategic partnership and investment" with Scale late Thursday. Scale said the $14.3 billion investment puts its market value at over $29 billion (€25 billion). Scale said it will remain an independent company, but the agreement will "substantially expand Scale and Meta's commercial relationship". Meta will hold a 49 per cent stake in the start-up. Wang, though leaving for Meta with a small group of other Scale employees, will remain on Scale's board of directors. Replacing him is a new interim Scale CEO Jason Droege, who was previously the company's chief strategy officer and had past executive roles at Uber Eats and Axon. Focus on 'superintelligence' Zuckerberg's increasing focus on the abstract idea of "superintelligence" - which rival companies call artificial general intelligence, or AGI - is the latest pivot for a tech leader who in 2021 went all-in on the idea of the metaverse, changing the company's name and investing billions into advancing virtual reality and related technology. It won't be the first time since ChatGPT's 2022 debut sparked an AI arms race that a big tech company has gobbled up talent and products at innovative AI startups without formally acquiring them. Microsoft hired key staff from startup Inflection AI, including co-founder and CEO Mustafa Suleyman, who now runs Microsoft's AI division. Google pulled in the leaders of AI chatbot company Character.AI, while Amazon made a deal with San Francisco-based Adept that sent its CEO and key employees to the e-commerce giant. Amazon also got a license to Adept's AI systems and datasets. Wang was a 19-year-old student at the Massachusetts Institute of Technology (MIT) when he and co-founder Lucy Guo started Scale in 2016. They won influential backing that summer from the startup incubator Y Combinator, which was led at the time by Sam Altman, now the CEO of OpenAI. Wang dropped out of MIT, following a trajectory similar to that of Zuckerberg, who quit Harvard University to start Facebook more than a decade earlier. Servicing LLMs Scale's pitch was to supply the human labour needed to improve AI systems, hiring workers to draw boxes around a pedestrian or a dog in a street photo so that self-driving cars could better predict what's in front of them. General Motors and Toyota have been among Scale's customers. What Scale offered to AI developers was a more tailored version of Amazon's Mechanical Turk, which had long been a go-to service for matching freelance workers with temporary online jobs. More recently, the growing commercialisation of AI large language models - the technology behind OpenAI's ChatGPT, Google's Gemini, and Meta's Llama - brought a new market for Scale's annotation teams. The company claims to service "every leading large language model," including those from Anthropic, OpenAI, Meta, and Microsoft, by helping to fine-tune their training data and test their performance. It's not clear what the Meta deal will mean for Scale's other customers. Wang has also sought to build close relationships with the U.S. government, winning military contracts to supply AI tools to the Pentagon and attending President Donald Trump's inauguration. The head of Trump's science and technology office, Michael Kratsios, was an executive at Scale for the four years between Trump's first and second terms. Meta has also begun providing AI services to the federal government. Meta has taken a different approach to AI than many of its rivals, releasing its flagship Llama system for free as an open weight product that enables people to use and modify some of its key components. Scepticism around LLMs Meta says more than a billion people use its AI products each month, but it's also widely seen as lagging behind competitors such as OpenAI and Google in encouraging consumer use of large language models, also known as LLMs. It hasn't yet released its purportedly most advanced model, Llama 4 Behemoth, despite previewing it in April as "one of the smartest LLMs in the world and our most powerful yet". Meta's chief AI scientist Yann LeCun, who in 2019 was a winner of computer science's top prize for his pioneering AI work, has expressed scepticism about the tech industry's current focus on LLMs. "How do we build AI systems that understand the physical world, that have persistent memory, that can reason and can plan?" LeCun asked at a French tech conference last year. These are all characteristics of intelligent behaviour that large language models "basically cannot do, or they can only do them in a very superficial, approximate way," LeCun said. Instead, he emphasised Meta's interest in "tracing a path towards human-level AI systems, or perhaps even superhuman". When he returned to France's annual VivaTech conference again on Wednesday, LeCun dodged a question about the pending Scale deal but said his AI research team's plan has "always been to reach human intelligence and go beyond it". "It's just that now we have a clearer vision for how to accomplish this," he said. LeCun co-founded Meta's AI research division more than a decade ago with Rob Fergus, a fellow professor at New York University. Fergus later left for Google but returned to Meta last month after a 5-year absence to run the research lab, replacing longtime director Joelle Pineau. Fergus wrote on LinkedIn last month that Meta's commitment to long-term AI research "remains unwavering" and described the work as "building human-level experiences that transform the way we interact with technology".

Why Meta is Investing in Scale AI | AIM

Big tech companies investing in AI startups is not new. The likes of Microsoft, Google, and Amazon have been engaging in the practice for a while now. Meta has also shown some activity in that space, but not as much as its competitors. Earlier this year, Reuters reported that the company plans to invest up to $65 billion in AI-related projects. It appears that $10 billion of this amount would be invested in Scale AI, an AI startup that helps enterprises develop their own models or apply foundation models to their business. They do that through data labelling and reinforcement learning with human feedback (RLHF). Until now, Meta's strategy revolved around open source leadership with Llama, Meta AI, and other research efforts. But the tectonic plates are shifting. Microsoft's $13 billion bet on OpenAI, Amazon's $8 billion investment in Anthropic, and Google's investments in Anthropic have effectively locked down much of the top-tier model infrastructure within tightly integrated ecosystems. Big tech companies are partnering with the best out there to make sure they leverage the technologies to their advantage. Scale AI is one of the major players in the data collection and labelling market. It already works with tech giants like Microsoft and OpenAI. As per reports, the company was recently valued at approximately $14 billion in a 2024 funding round supported by Meta and Microsoft and was reportedly in discussions earlier this year for a tender offer that would value it at $25 billion. As per the reports, Meta's significant external AI investment in Scale AI is noted as the company's largest to date. This move is unusual for the Mark Zuckerberg-led company, which typically relies on internal research and a more open development approach to advance its AI capabilities. Unlike its competitors, Meta does not offer cloud computing. Hence, the investment in Scale AI could help the case. However, the company has yet to clarify this. Beyond the numbers, there can also be optics at play. For a company constantly under regulatory scrutiny, Meta's partnership with Scale AI, a company that regularly testifies before the US Congress and holds DoD contracts, adds a layer of institutional credibility. The Defense Llama project, a version of Meta's model tailored for US national security use, has already laid the groundwork for this purpose. It is a customised large language model based on Meta's Llama 3. Scale AI mentioned that it was built within Scale's Donovan platform and deployed exclusively in secure government environments. It supports military and intelligence use cases such as operational planning and adversary analysis. The model was trained using Scale's data engine and fine-tuned on military doctrine, international law, and DoD ethical guidelines to provide responses tailored to national security professionals, including alignment with ODNI's writing style. According to an SNS Insider report, the global data collection and labelling market was valued at $3.0 billion in 2023 and is projected to reach $29.2 billion by 2032, growing at a CAGR of 28.54%. This rapid growth is being driven by the rising adoption of AI and machine learning across industries, which require vast volumes of high-quality labelled data. With applications ranging from speech recognition and image classification to autonomous decision-making, companies are increasingly investing in automated and human-in-the-loop annotation processes. Ethical AI development, reduced algorithmic bias, and demand for diverse datasets are also shaping innovation in this field. The report states that the interest in labelled text data is gaining traction for NLP-driven tools like chatbots and sentiment analysis, making it the fastest-growing segment. "Some big-money companies, like Google, Microsoft, and Amazon, are spending a lot on labelled datasets for improving AI-backed searches, voice-assistants, or other modern recommendation systems," read the report. Llama 4 launched with a couple of complaints and controversies surrounding the benchmarks. While the company denied any wrongdoing, this did not give it a good public image. The company's interest in scaling things up with an investment in Scale AI should allow them to do better, faster, and improve the state of their AI offerings, whether for enterprises or consumers.

Report: Meta holding talks over $10B investment in data labeling startup Scale AI - SiliconANGLE

Report: Meta holding talks over $10B investment in data labeling startup Scale AI Meta Platforms Inc. is looking to invest billions of dollars into the artificial intelligence data labeling startup Scale AI Inc. The company is holding talks over a funding deal that could see it inject more than $10 billion into the startup, though the terms have not yet been agreed and could still change, anonymous sources told Bloomberg. Scale AI's customer base reads like a who's who of the AI scene, with the startup serving Meta, Microsoft Corp., OpenAI and many others. It helps them train their large language models by providing fresh, formatted and subject-specific datasets. Like many of its clients, it has emerged as a major beneficiary of the rise of generative AI, and following its most recent $1 billion funding round in May 2024, it was valued at a cool $13.8 billion. Earlier this year, Bloomberg reported it was in discussions over a tender offer that would increase its value to $25 billion. If the reported $10 billion figure is true, it would represent Meta's largest ever external AI investment, and also be a significant departure from a company that has largely relied on its in-house data and research until now. In contrast, its rival Microsoft has already invested more than $13 billion into OpenAI, while Alphabet Inc. and Amazon.com Inc. have invested billions into Anthropic PBC. A significant chunk of those rivals' investments took the form of cloud computing credits, giving them access to computing resources. Meta doesn't have a public cloud infrastructure business so it cannot do this, which means its investment would likely involve more cash up front. Meta Chief Executive Mark Zuckerberg (pictured), who has pursued a more open approach to AI development with the company's Llama LLMs, has made the technology his number one priority, superseding his ambitions to build the "metaverse" that inspired its name. In January, he told investors he's planning to spend as much as $65 billion on AI investments this year. It's pushing to make Llama a global standard, and it has had some success in that endeavor, claiming that its Meta AI chatbot is already used by more than one billion people per month. Scale AI was co-founded in 2016 by its CEO Alexandr Wang and has grown rapidly in recent years, generating revenue of around $870 million in 2024. It has forecast its sales to hit more than $2 billion by the end of this year, according to Bloomberg. That's because its data labeling services have become increasingly vital for AI developers. After all, AI models are only as good as the data they are trained on, and most data tends to be rather "messy", meaning its poorly formatted and can't be read easily by AI algorithms. To fix this, Scale AI relies on scores of contract workers to clean up text, image and other types of unstructured data and tag it, so AI models understand what it is. These clean datasets are then used for training purposes. Meta and Scale AI have both attracted interest from the defense sector. Last week, Meta revealed it has entered into a partnership with the defense contractor Anduril Industries Inc. that will see it develop hi-tech tools for the military, such as an AI-powered helmet that's equipped with augmented reality and virtual reality capabilities. Its Llama models have also been approved for use by various defense contractors and government agencies. As for Scale AI, it has been working with U.S. government to create AI services for defense purposes. For instance, it recently landed a contract with the Department of Defense to help it develop AI agents. It's also working directly with Meta on a program called Defense Llama, which is a customized version of the Llama model for use by the military. Meanwhile, Wang has cozied up to some key figures in the U.S. government, playing on fears around China's ascendence in the AI industry. Former Scale AI executive Michael Kratsios has become one of President Donald Trump's top advisors on AI. Scale AI has also attracted controversy. Its workforce is mostly made up of overseas contractors from countries such as the Philippines and Kenya, who are reportedly paid a low wage to sort through masses of data. In March, it emerged that the U.S. Department of Labor was investigating the company over alleged violations of the Fair Labor Standards Act. During that investigation, some employees claimed they had suffered psychological trauma due to some of the content they were asked to work with. Scale AI denies the allegations, and in a 2019 interview Wang told Bloomberg that the startup's contractors earn "good pay", claiming that they're among the higher earners in their geographies. In any case, the Labor department recently dropped its investigation into the company. More recently, Scale AI has evolved its business to provide customers with higher quality data that can be used to train more sophisticated AI systems that can perform tasks at the same level of humans. To do this, Scale AI says it has hired better-paid contractors with graduate degrees, who are asked to construct tricky problems or tests that can be used in reinforcement learning, which is a process that rewards AI systems for correct answers and punishes them for mistakes. One of Bloomberg's sources said around 12% of the company's contractors now have a PhD in areas such as molecular biology, with around 40% holding a master's degree, law degree or MBA. These experts are reportedly working on training datasets for companies building more sophisticated legal and medical AI applications.

Scale AI CEO Alexandr Wang departs to join Meta after securing multibillion investment - SiliconANGLE

Scale AI CEO Alexandr Wang departs to join Meta after securing multibillion investment Scale AI Inc. says its founder and Chief Executive Alexandr Wang is leaving to join Meta Platforms Inc., after confirming that the social media giant has made a "significant" investment in the company. The red-hot artificial intelligence startup said Chief Strategy Officer Jason Droege will take over from Wang as its new interim CEO, but it didn't say what its plans are in terms of finding a permanent successor. The size of Meta's investment was not revealed, but Reuters quoted two sources familiar with the matter as saying it has injected $14.3 billion into the company in return for a 49% stake in its ownership. Scale said deal values the startup at a cool $29 billion. Wang is set to lead a new AI research lab at Meta, and he will be joined by an unknown number of his colleagues from Scale, the New York Times reported. "I have agreed that Jason Droege will step in as interim CEO," Wang wrote in a letter to employees that was posted on X: Scale AI has emerged as a significant player in the AI industry, though it doesn't develop its own AI models. Instead, it helps AI model developers like OpenAI, Google LLC and Meta with its data labeling services, which allow them to create the vast datasets needed to teach large language models. The company was founded by Wang in 2016, and has grown rapidly in recent years, generating revenue of around $870 million in 2024. Its growth is expected to accelerate exponentially, and Bloomberg reported earlier this year that it's forecasting sales of more than $2 billion in 2025. Its data labeling services have become increasingly important because AI models are only as good as the data they are trained on, and the vast majority of information tends to be poorly formatted, which makes it difficult for AI algorithms to read and understand. To solve this, Scale AI hires thousands of contract workers who "clean" this data and tag it, so AI models can understand what they're looking at. These cleaned up datasets are much more effective for AI training. As Scale AI has grown its relevance, so too has Wang, who has spent the last year cozying up to various figures in the U.S. government, alongside AI industry luminaries such as OpenAI's Sam Altman and Nvidia Corp.'s Jensen Huang. He has notably testified before Congress, and has featured on the front cover of prominent magazines such as The Entrepreneur: Wang is taking on a big responsibility at Meta, which has been pouring billions of dollars into AI research as part of its efforts to keep pace with the likes of OpenAI and Google. Although it has had success with its open-source Llama LLM models, few people have described Meta as being ahead of its rivals. Its latest Llama models have only had a lukewarm reception, and it has reportedly come unstuck in its efforts to improve on them. As such, it's believed that Meta CEO Mark Zuckerberg is growing frustrated, and so he's placing a lot of faith in Wang's ability to advance its AI training efforts. According to The Information, Wang will head up a new "superintelligence" AI unit inside Meta that's focused on developing "artificial general intelligence" or AGI, which is a term that refers to futuristic AI machines that can surpass human capabilities. Not much is known about the interim CEO Droege. According to his LinkedIn profile, he only joined Scale AI recently, in August 2024, having previously served as a vice president of Uber Technologies Inc. and a partner at the venture capital firm Benchmark. In any case, Wang insisted that he's not abandoning Scale AI by any means. "While it is bittersweet to depart as CEO, I would never leave Scale AI behind," he said in his letter to employees. "I'll stay on as a director on the board, continuing to support Scale's mission and long-term vision."

Meta invests $14.3bn in Scale AI, hires start-up's CEO

The nine-year-old Scale AI counts Microsoft, OpenAI and the US government among its clients. Meta is investing $14.3bn into artificial intelligence start-up Scale AI, in a deal aimed at improving its capabilities in the tech. Earlier this week, sources told CNBC that the deal came as CEO Mark Zuckerberg was increasingly "frustrated" at his own company's standing in AI. As part of the deal, Scale's founder and CEO, the 28-year-old Alexandr Wang, will be leaving his start-up to join Meta, taking up a prominent role to advance the company's AI efforts. According to reports, Wang is set to lead a new division at the company called the Superintelligence lab. He will, however, continue as part of Scale's board of directors. The investment values Scale at more than $29bn. Sources tell Reuters that Meta will take a 49pc stake in the company. The deal marks Meta's second-largest, following the more than $20bn acquisition of WhatsApp back in 2014. Wang founded Scale AI in 2016 at the age of 19 after a brief stint at Massachusetts Institute of Technology, from where he dropped out. After quitting university, he joined start-up accelerator Y Combinator to launch his company. Scale AI provides specialised data to train AI and evaluates models and applications. Its wide-ranging clients include AI leaders such as OpenAI, Microsoft and Cohere, as well as several sectors of the US government. "As part of this, we will deepen the work we do together producing data for AI models and Alexandr Wang will join Meta to work on our superintelligence efforts," a Meta spokesperson told news outlets. Commenting on the deal, Wang said: "Meta's investment recognises Scale's accomplishments to date." "AI is one of the most revolutionary technologies of our time, with unlimited possibility and far-reaching influence on how people, businesses and governments succeed," he added. In Wang's absence, Scale has appointed chief strategy officer Jason Droege to serve as the company's interim CEO. Droege joined Scale in September 2024 and has more than 20 years of experience working in companies including Uber Eats and Axon. "Meta's new investment and our broadened commercial agreement is a testament to the incredible work and dedication of the entire Scale team, and the tremendous upside that lies ahead for Scale," said Droege. Last month, Meta announced that it will be releasing its AI chatbot in Europe. The company had paused its launch in the region for nearly two years following pushback from the Irish Data Protection Commission over training AI models on European data. Don't miss out on the knowledge you need to succeed. Sign up for the Daily Brief, Silicon Republic's digest of need-to-know sci-tech news.

From MIT Dropout to Billionaire: How Alexander Wang Built Scale AI | AIM

He began his entrepreneurial journey at San Francisco's startup accelerator, Y Combinator, in 2016. When Alexander Wang founded Scale AI in 2016, the AI landscape was still in its early stages. The data labelling startup, driven by Wang's vision, quickly became a key player in the AI landscape, growing to over 1,500 employees and securing crucial partnerships across industries and governments. Now, with Meta's $14.3 billion investment in Scale AI for a 49% stake, and Wang's shift to Meta's SuperIntelligence Lab, the journey of this 28-year-old billionaire is nothing short of remarkable. This transition was confirmed through a company statement. While Wang has stepped down from his role at Scale AI, he will continue to maintain a position on the company's board of directors. Wang founded Scale AI at 16 after dropping out from MIT. In a parting note to his employees, Wang highlighted that this was a period when AI started gaining traction -- DeepMind had just launched AlphaGo, and Google had rolled out TensorFlow. Yet, the industry was still in its early stages. Scale AI provides data labelling and model evaluation for AI training and serves clients such as Meta, OpenAI, Microsoft, and the US defence department. He began his entrepreneurial journey at San Francisco's renowned startup accelerator, Y Combinator, in the Summer 2016 batch, along with his co-founder Lucy Guo. Reflecting on the early days of building Scale AI, Wang, in a podcast hosted by South Park Commons, said, "The first half of our batch...was probably...[what] we refer to as a squiggle -- a lot of existential angst; you don't really know what you're doing with your life." However, despite the uncertainty, he believes it all came together. "Ultimately, we built Scale...It was like a perfect storm; a lot of serendipity," he said. Wang explained that the core idea was simple: in the future, human computation would be orchestrated much more dynamically, but the necessary API was still lacking. Scale AI is just one of the many AI startups born out of Y Combinator. His time at YC and, eventually, Silicon Valley, led to him making powerful connections in the tech and venture capital ecosystem. This acqui-hire strengthens Meta's position in the AGI race, in addition to its previous significant acquisitions in social media, like Instagram and WhatsApp, and VR, such as Oculus. "Wang is joining Meta to work on Meta's AI efforts. He will continue to serve as a director on the Scale board of directors and support the company's ongoing work to unlock the power of AI and keep human values at the forefront," the company said in a statement. Meanwhile, the company announced Jason Droege, who has extensive experience at Uber Eats and AXON, as the new interim CEO. When The Information first broke the news about this deal, an investor highlighted the advantages this structure provides for Meta. "It's a very interesting structure, where Meta effectively gains control of Scale AI, bypasses antitrust review, and acquires top talent, including Alexander Wang, all while paying only half of the cash needed to buy the entire company," he wrote. Notably, Axios previously reported that Meta is restructuring its AI operations. Through this, the company is creating two teams -- AI Products, led by Connor Hayes, which focuses on tools like Meta AI assistant; and AGI Foundations, co-headed by Ahmad Al-Dahle and Amir Frenkel, which works on foundational technologies like Llama models. A subgroup from Facebook Artificial Intelligence Research (FAIR) will join the AGI team. As per reports, even though no job cuts are planned, leadership changes are to be expected. Big tech companies are partnering with the top players in the field to ensure they can harness these technologies to their advantage. Historically, Microsoft's $13 billion investment in OpenAI, Amazon's $8 billion stake in Anthropic, and Google's backing of Anthropic have effectively secured much of the top-tier model infrastructure within their tightly integrated ecosystems. In addition, Meta's partnership with Scale AI, which has ties to the US government, improves its institutional credibility and supports initiatives like the Defense Llama project -- a version of Meta's model for national security applications. The data collection and labelling market is growing rapidly and is expected to reach $29.2 billion by 2032, driven by the increasing demand for high-quality labelled data for AI and machine learning. Scale AI is one of the major players in the market. It already works with tech giants like Microsoft and OpenAI. As per reports, the company was recently valued at approximately $14 billion in a 2024 funding round supported by Meta and Microsoft. Moreover, it was reportedly in discussions earlier this year for a tender offer that would value it at $25 billion. Unlike its competitors, Meta does not offer cloud computing services, making the investment in Scale AI essential for improving its AI capabilities and access to quality labelled data.

Mark Zuckerberg's superintelligence gamble: Can billions and bold hires save Meta's AI ambitions?

Mark Zuckerberg has decided he wants to claw back lost ground in the AI race, and he's willing to spend heavily to do it. The Meta CEO is reportedly hiring staff personally for a new superintelligence lab within the company, offering massive salaries to attract top talent. Meta has also announced the acquisition of Scale AI, with founder Alexandr Wang joining the superintelligence team. "I'm not surprised with the choice of Alex Wang -- he is friends with Zuckerberg," says a former Meta employee, granted anonymity due to restrictions from their current employer. Wang's political leanings may help deflect regulatory scrutiny, the former staffer adds, and "he also has a track record of executing whereas the new Meta AI leads have messed up Llama big time." The real challenge may be finding people to join them. AI talent is in high demand, with leading labs offering millions to top engineers. Meta, with its vast resources, is reportedly offering up to nine-figure compensation packages. "Meta has been trying to pull in top-tier talent from other labs for a while now, like the big 'open source AGI' announcement on Zuck's Instagram," says another industry source who requested anonymity. "I guess they felt they needed to mix it up for whatever reason." But Meta's reputation could be a hurdle. "What you have to understand about Meta is that it's very Game of Thrones-like, with people constantly fighting over power and influence," says the former employee. Bloat and excessive middle management remain problems. "That's a major reason why their products are crap and now it's affecting their AI research too," the former employee adds. (Meta did not immediately respond to a request for comment.)

Meta invests $14.3B in AI firm Scale and recruits its CEO for 'superintelligence' team

Meta is making a $14.3 billion investment in artificial intelligence company Scale and recruiting its CEO Alexandr Wang to join a team developing "superintelligence" at the tech giant. The deal announced Thursday reflects a push by Meta CEO Mark Zuckerberg to revive AI efforts at the parent company of Facebook and Instagram as it faces tough competition from rivals such as Google and OpenAI. Meta announced what it called a "strategic partnership and investment" with Scale late Thursday. Scale said the $14.3 billion investment puts its market value at over $29 billion. Scale said it will remain an independent company but the agreement will "substantially expand Scale and Meta's commercial relationship." Meta will hold a 49% stake in the startup. Wang, though leaving for Meta with a small group of other Scale employees, will remain on Scale's board of directors. Replacing him is a new interim Scale CEO Jason Droege, who was previously the company's chief strategy officer and had past executive roles at Uber Eats and Axon. Zuckerberg's increasing focus on the abstract idea of "superintelligence" -- which rival companies call artificial general intelligence, or AGI -- is the latest pivot for a tech leader who in 2021 went all-in on the idea of the metaverse, changing the company's name and investing billions into advancing virtual reality and related technology. It won't be the first time since ChatGPT's 2022 debut sparked an AI arms race that a big tech company has gobbled up talent and products at innovative AI startups without formally acquiring them. Microsoft hired key staff from startup Inflection AI, including co-founder and CEO Mustafa Suleyman, who now runs Microsoft's AI division. Google pulled in the leaders of AI chatbot company Character.AI, while Amazon made a deal with San Francisco-based Adept that sent its CEO and key employees to the e-commerce giant. Amazon also got a license to Adept's AI systems and datasets. Wang was a 19-year-old student at the Massachusetts Institute of Technology when he and co-founder Lucy Guo started Scale in 2016. They won influential backing that summer from the startup incubator Y Combinator, which was led at the time by Sam Altman, now the CEO of OpenAI. Wang dropped out of MIT, following a trajectory similar to that of Zuckerberg, who quit Harvard University to start Facebook more than a decade earlier. Scale's pitch was to supply the human labor needed to improve AI systems, hiring workers to draw boxes around a pedestrian or a dog in a street photo so that self-driving cars could better predict what's in front of them. General Motors and Toyota have been among Scale's customers. What Scale offered to AI developers was a more tailored version of Amazon's Mechanical Turk, which had long been a go-to service for matching freelance workers with temporary online jobs. More recently, the growing commercialization of AI large language models -- the technology behind OpenAI's ChatGPT, Google's Gemini and Meta's Llama -- brought a new market for Scale's annotation teams. The company claims to service "every leading large language model," including from Anthropic, OpenAI, Meta and Microsoft, by helping to fine tune their training data and test their performance. It's not clear what the Meta deal will mean for Scale's other customers. Wang has also sought to build close relationships with the U.S. government, winning military contracts to supply AI tools to the Pentagon and attending President Donald Trump's inauguration. The head of Trump's science and technology office, Michael Kratsios, was an executive at Scale for the four years between Trump's first and second terms. Meta has also begun providing AI services to the federal government. Meta has taken a different approach to AI than many of its rivals, releasing its flagship Llama system for free as an open-source product that enables people to use and modify some of its key components. Meta says more than a billion people use its AI products each month, but it's also widely seen as lagging behind competitors such as OpenAI and Google in encouraging consumer use of large language models, also known as LLMs. It hasn't yet released its purportedly most advanced model, Llama 4 Behemoth, despite previewing it in April as "one of the smartest LLMs in the world and our most powerful yet." Meta's chief AI scientist Yann LeCun, who in 2019 was a winner of computer science's top prize for his pioneering AI work, has expressed skepticism about the tech industry's current focus on large language models. "How do we build AI systems that understand the physical world, that have persistent memory, that can reason and can plan?" LeCun asked at a French tech conference last year. These are all characteristics of intelligent behavior that large language models "basically cannot do, or they can only do them in a very superficial, approximate way," LeCun said. Instead, he emphasized Meta's interest in "tracing a path towards human-level AI systems, or perhaps even superhuman." When he returned to France's annual VivaTech conference again on Wednesday, LeCun dodged a question about the pending Scale deal but said his AI research team's plan has "always been to reach human intelligence and go beyond it." "It's just that now we have a clearer vision for how to accomplish this," he said. LeCun co-founded Meta's AI research division more than a decade ago with Rob Fergus, a fellow professor at New York University. Fergus later left for Google but returned to Meta last month after a 5-year absence to run the research lab, replacing longtime director Joelle Pineau. Fergus wrote on LinkedIn last month that Meta's commitment to long-term AI research "remains unwavering" and described the work as "building human-level experiences that transform the way we interact with technology."

Meta's AI shortfall prompts Zuckerberg's $15B investment in Scale AI -- Report

Mark Zuckerberg is reportedly assembling a superintelligence group that will include Scale AI founder Alexandr Wang. Meta Platforms is reportedly acquiring a 49% stake in Scale AI, a leading data labeling company that powers many AI applications, as CEO Mark Zuckerberg seeks to strengthen Meta's position in the competitive artificial intelligence landscape. After days of speculation, The Information reported on Tuesday that Meta has finalized a $14.8 billion deal for a significant minority share in Scale AI. According to sources familiar with the negotiations, the transaction was completed in cash and includes Scale AI's CEO, Alexandr Wang, joining Meta as part of a new "Superintelligence" initiative. Bloomberg reported on Monday that Zuckerberg has grown frustrated with Meta's progress in AI and is assembling a large team to pursue artificial general intelligence -- a future form of AI that could match or surpass human cognitive abilities. Ben Goertzel, a computer scientist and founder of SingularityNET, an AI decentralized ecosystem, says major breakthroughs in AGI could be a few years away. "We're likely to be able to launch AGI that can think and generalize beyond its training and programming within the next one to three years," he told Cointelegraph in a recent interview. Goertzel says decentralization offers the best path for safeguarding the future of AGI. In the meantime, Big Tech firms are intensifying their efforts to be among the first to achieve this potentially transformative milestone. Related: The next frontier for crypto will be decentralizing AI America's largest technology companies -- including Meta, Amazon, Alphabet and Microsoft -- are expected to invest $320 billion in AI and related data center infrastructure this year alone, according to CNBC. That represents a sharp increase from the $230 billion invested last year. A separate analysis by Bloomberg Intelligence's Robert Schiffman found that AI capital expenditures have increased by 16% since the start of 2025. As AI spending continues to grow, companies involved in building the underlying infrastructure are well-positioned to benefit. Goldman Sachs analyzed a basket of stocks in the AI data center and electrical equipment sectors and found they have risen 52% and 39%, respectively, since their April lows.

Meta invests in AI firm Scale and recruits its CEO for 'superintelligence' team

Meta is making a $14.3 billion investment in artificial intelligence company Scale and recruiting its CEO Alexandr Wang to join a team developing "superintelligence" at the tech giant. The deal announced Thursday reflects a push by Meta CEO Mark Zuckerberg to revive AI efforts at the parent company of Facebook and Instagram as it faces tough competition from rivals such as Google and OpenAI. Meta announced what it called a "strategic partnership and investment" with Scale late Thursday. Scale said the $14.3 billion investment puts its market value at over $29 billion. Scale said it will remain an independent company but the agreement will "substantially expand Scale and Meta's commercial relationship." Meta will hold a 49% stake in the startup. Wang, though leaving for Meta with a small group of other Scale employees, will remain on Scale's board of directors. Replacing him is a new interim Scale CEO Jason Droege, who was previously the company's chief strategy officer and had past executive roles at Uber Eats and Axon. Zuckerberg's increasing focus on the abstract idea of "superintelligence" -- which rival companies call artificial general intelligence, or AGI -- is the latest pivot for a tech leader who in 2021 went all-in on the idea of the metaverse, changing the company's name and investing billions into advancing virtual reality and related technology. It won't be the first time since ChatGPT's 2022 debut sparked an AI arms race that a big tech company has gobbled up talent and products at innovative AI startups without formally acquiring them. Microsoft hired key staff from startup Inflection AI, including co-founder and CEO Mustafa Suleyman, who now runs Microsoft's AI division. Google pulled in the leaders of AI chatbot company Character.AI, while Amazon made a deal with San Francisco-based Adept that sent its CEO and key employees to the e-commerce giant. Amazon also got a license to Adept's AI systems and datasets. Wang was a 19-year-old student at the Massachusetts Institute of Technology when he and co-founder Lucy Guo started Scale in 2016. They won influential backing that summer from the startup incubator Y Combinator, which was led at the time by Sam Altman, now the CEO of OpenAI. Wang dropped out of MIT, following a trajectory similar to that of Zuckerberg, who quit Harvard University to start Facebook more than a decade earlier. Scale's pitch was to supply the human labor needed to improve AI systems, hiring workers to draw boxes around a pedestrian or a dog in a street photo so that self-driving cars could better predict what's in front of them. General Motors and Toyota have been among Scale's customers. What Scale offered to AI developers was a more tailored version of Amazon's Mechanical Turk, which had long been a go-to service for matching freelance workers with temporary online jobs. More recently, the growing commercialization of AI large language models -- the technology behind OpenAI's ChatGPT, Google's Gemini and Meta's Llama -- brought a new market for Scale's annotation teams. The company claims to service "every leading large language model," including from Anthropic, OpenAI, Meta and Microsoft, by helping to fine tune their training data and test their performance. It's not clear what the Meta deal will mean for Scale's other customers. Wang has also sought to build close relationships with the U.S. government, winning military contracts to supply AI tools to the Pentagon and attending President Donald Trump's inauguration. The head of Trump's science and technology office, Michael Kratsios, was an executive at Scale for the four years between Trump's first and second terms. Meta has also begun providing AI services to the federal government. Meta has taken a different approach to AI than many of its rivals, releasing its flagship Llama system for free as an open-source product that enables people to use and modify some of its key components. Meta says more than a billion people use its AI products each month, but it's also widely seen as lagging behind competitors such as OpenAI and Google in encouraging consumer use of large language models, also known as LLMs. It hasn't yet released its purportedly most advanced model, Llama 4 Behemoth, despite previewing it in April as "one of the smartest LLMs in the world and our most powerful yet." Meta's chief AI scientist Yann LeCun, who in 2019 was a winner of computer science's top prize for his pioneering AI work, has expressed skepticism about the tech industry's current focus on large language models. "How do we build AI systems that understand the physical world, that have persistent memory, that can reason and can plan?" LeCun asked at a French tech conference last year. These are all characteristics of intelligent behavior that large language models "basically cannot do, or they can only do them in a very superficial, approximate way," LeCun said. Instead, he emphasized Meta's interest in "tracing a path towards human-level AI systems, or perhaps even superhuman." When he returned to France's annual VivaTech conference again on Wednesday, LeCun dodged a question about the pending Scale deal but said his AI research team's plan has "always been to reach human intelligence and go beyond it." "It's just that now we have a clearer vision for how to accomplish this," he said. LeCun co-founded Meta's AI research division more than a decade ago with Rob Fergus, a fellow professor at New York University. Fergus later left for Google but returned to Meta last month after a 5-year absence to run the research lab, replacing longtime director Joelle Pineau. Fergus wrote on LinkedIn last month that Meta's commitment to long-term AI research "remains unwavering" and described the work as "building human-level experiences that transform the way we interact with technology."

Meta invests in AI firm Scale and recruits its CEO for 'superintelligence' team

Meta said Thursday it is making a large investment in artificial intelligence company Scale and recruiting its CEO Alexandr Wang to join a team developing "superintelligence" at the tech giant. The move reflects a push by Meta CEO Mark Zuckerberg to revive AI efforts at the parent company of Facebook and Instagram as it faces tough competition from competitors such as Google and OpenAI. Meta announced what it called a "strategic partnership and investment" with Scale late Thursday but didn't disclose the financial terms of the deal. Scale said the added investment puts its market value at over $29 billion. Scale said it will remain an independent company but the agreement will "substantially expand Scale and Meta's commercial relationship." Meta will hold a minority of Scale's outstanding equity. Wang, though joining Meta, will also remain on Scale's board of directors. Replacing him is a new interim Scale CEO Jason Droege, who was previously the company's chief strategy officer and had past jobs at Uber Eats and Axon. It won't be the first time a big tech company has gobbled up talent and products at innovative AI startups without formally acquiring them. Microsoft hired key staff from startup Inflection AI, including co-founder and CEO Mustafa Suleyman, who now runs Microsoft's AI division. Google pulled in the leaders of AI chatbot company Character.AI, while Amazon made a deal with San Francisco-based Adept that sent its CEO and key employees to the e-commerce giant. Amazon also got a license to Adept's AI systems and datasets. Wang was a 19-year-old student at the Massachusetts Institute of Technology when he and co-founder Lucy Guo started Scale in 2016. They won influential backing that summer from the startup incubator Y Combinator, which was led at the time by Sam Altman, now the CEO of OpenAI. Wang dropped out of MIT, following a trajectory similar to that of Meta CEO Mark Zuckerberg, who quit Harvard University to start Facebook more than a decade earlier. Scale's pitch was to supply the human labor needed to improve AI systems, hiring workers to draw boxes around a pedestrian or a dog in a street photo so that self-driving cars could better predict what's in front of them. General Motors and Toyota have been among Scale's customers. What Scale offered to AI developers was a more tailored version of Amazon's Mechanical Turk, which had long been a go-to service for matching freelance workers with temporary online jobs. More recently, the growing commercialization of AI large language models -- the technology behind OpenAI's ChatGPT, Google's Gemini and Meta's Llama -- brought a new market for Scale's annotation teams. The company claims to service "every leading large language model," including from Anthropic, OpenAI, Meta and Microsoft, by helping to fine tune their training data and test their performance. It's not clear what the Meta deal will mean for Scale's other customers. Wang has also sought to build close relationships with the U.S. government, winning military contracts to supply AI tools to the Pentagon and attending President Donald Trump's inauguration. The head of Trump's science and technology office, Michael Kratsios, was an executive at Scale for the four years between Trump's first and second terms. Meta has also begun providing AI services to the federal government. Meta has taken a different approach to AI than many of its rivals, releasing its flagship Llama system for free as an open-source product that enables people to use and modify some of its key components. Meta says more than a billion people use its AI products each month, but it's also widely seen as lagging behind competitors such as OpenAI and Google in encouraging consumer use of large language models, also known as LLMs. It hasn't yet released its purportedly most advanced model, Llama 4 Behemoth, despite previewing it in April as "one of the smartest LLMs in the world and our most powerful yet." Meta's chief AI scientist Yann LeCun, who in 2019 was a winner of computer science's top prize for his pioneering AI work, has expressed skepticism about the tech industry's current focus on large language models. "How do we build AI systems that understand the physical world, that have persistent memory, that can reason and can plan?" LeCun asked at a French tech conference last year. These are all characteristics of intelligent behavior that large language models "basically cannot do, or they can only do them in a very superficial, approximate way," LeCun said. Instead, he emphasized Meta's interest in "tracing a path towards human-level AI systems, or perhaps even superhuman." LeCun co-founded Meta's AI research division more than a decade ago with Rob Fergus, a fellow professor at New York University. Fergus later left for Google but returned to Meta last month after a 5-year absence to run the research lab, replacing longtime director Joelle Pineau. Fergus wrote on LinkedIn last month that Meta's commitment to long-term AI research "remains unwavering" and described the work as "building human-level experiences that transform the way we interact with technology."

Meta Eyes $10 Billion AI Investment

Meta Platforms is reportedly considering a more than $10 billion investment in artificial intelligence startup Scale AI. The deal is still in talks and could potentially change, Bloomberg News reported on Sunday, citing "people familiar with the matter." Scale AI declined to comment and Meta did not return Reuters' request for comment, the outlet reported. Scale AI is a data labeling startup backed by Nvidia, Amazon, and Meta. It also helps researchers exchange AI-related information, with users in more than 9,000 municipalities. It was founded in 2016 and was last valued at nearly $14 billion.

Meta Invests in AI Firm Scale and Recruits Its CEO for 'Superintelligence' Team

Meta said Thursday it is making a large investment in artificial intelligence company Scale and recruiting its CEO Alexandr Wang to join a team developing "superintelligence" at the tech giant. The move reflects a push by Meta CEO Mark Zuckerberg to revive AI efforts at the parent company of Facebook and Instagram as it faces tough competition from competitors such as Google and OpenAI. Meta announced what it called a "strategic partnership and investment" with Scale late Thursday but didn't disclose the financial terms of the deal. Scale said the added investment puts its market value at over $29 billion. It won't be the first time a big tech company has gobbled up talent and products at innovative AI startups without formally acquiring them. Microsoft hired key staff from startup Inflection AI, including co-founder and CEO Mustafa Suleyman, who now runs Microsoft's AI division. Google pulled in the leaders of AI chatbot company Character.AI, while Amazon made a deal with San Francisco-based Adept that sent its CEO and key employees to the e-commerce giant. Amazon also got a license to Adept's AI systems and datasets. Wang was a 19-year-old student at the Massachusetts Institute of Technology when he and co-founder Lucy Guo started Scale in 2016. They won influential backing that summer from the startup incubator Y Combinator, which was led at the time by Sam Altman, now the CEO of OpenAI. Wang dropped out of MIT, following a trajectory similar to that of Meta CEO Mark Zuckerberg, who quit Harvard University to start Facebook more than a decade earlier. Scale's pitch was to supply the human labor needed to improve AI systems, hiring workers to draw boxes around a pedestrian or a dog in a street photo so that self-driving cars could better predict what's in front of them. General Motors and Toyota have been among Scale's customers. What Scale offered to AI developers was a more tailored version of Amazon's Mechanical Turk, which had long been a go-to service for matching freelance workers with temporary online jobs. More recently, the growing commercialization of AI large language models -- the technology behind OpenAI's ChatGPT, Google's Gemini and Meta's Llama -- brought a new market for Scale's annotation teams. The company claims to service "every leading large language model," including from Anthropic, OpenAI, Meta and Microsoft, by helping to fine tune their training data and test their performance. It's not clear what the Meta deal will mean for Scale's other customers. Wang has also sought to build close relationships with the U.S. government, winning military contracts to supply AI tools to the Pentagon and attending President Donald Trump's inauguration. The head of Trump's science and technology office, Michael Kratsios, was an executive at Scale for the four years between Trump's first and second terms. Meta has also begun providing AI services to the federal government. Meta has taken a different approach to AI than many of its rivals, releasing its flagship Llama system for free as an open-source product that enables people to use and modify some of its key components. Meta says more than a billion people use its AI products each month, but it's also widely seen as lagging behind competitors such as OpenAI and Google in encouraging consumer use of large language models, also known as LLMs. It hasn't yet released its purportedly most advanced model, Llama 4 Behemoth, despite previewing it in April as "one of the smartest LLMs in the world and our most powerful yet." Meta's chief AI scientist Yann LeCun, who in 2019 was a winner of computer science's top prize for his pioneering AI work, has expressed skepticism about the tech industry's current focus on large language models. "How do we build AI systems that understand the physical world, that have persistent memory, that can reason and can plan?" LeCun asked at a French tech conference last year. These are all characteristics of intelligent behavior that large language models "basically cannot do, or they can only do them in a very superficial, approximate way," LeCun said. Instead, he emphasized Meta's interest in "tracing a path towards human-level AI systems, or perhaps even superhuman." LeCun co-founded Meta's AI research division more than a decade ago with Rob Fergus, a fellow professor at New York University. Fergus later left for Google but returned to Meta last month after a 5-year absence to run the research lab, replacing longtime director Joelle Pineau. Fergus wrote on LinkedIn last month that Meta's commitment to long-term AI research "remains unwavering" and described the work as "building human-level experiences that transform the way we interact with technology." Copyright 2025 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Here's What You Need to Know About the Blockbuster Meta-Scale AI Deal

Wang explained a few other Scale employees will also move to Meta. He will remain on the board, and Scale's chief strategy officer, Jason Droege, will serve as interim CEO. Scale is an AI infrastructure company that promises to help AI-makers improve their models by lifting the quality of the data they use to train them. It provides labeled data for this purpose. Scale has been in the spotlight for allegedly subjecting contract workers to watching "depraved" content, triggering two lawsuits by freelancers who help label the data Scale sells to its customers. Some workers say they've developed PTSD due to reviewing disturbing material. Separately, in February a group of 45 former and current Scale AI contractors wrote to senators on the Committee on Commerce, Science and Transportation, describing what they said was a history of "wage theft" and "widespread labor abuses." Scale was at the time jockeying for lucrative contracts with the Department of Defense. In May a Department of Labor investigation into Scale AI, which had been ongoing since March, was abruptly scrapped. The investigation is connected to violations of the Fair Labor Standards Act, which sets rules on hourly payment, overtime and more. The move left freelancers confused as to why the inquiry was halted

Meta invests in Scale AI, hires CEO to work on 'superintelligence'

Meta, the parent company of Facebook and Instagram, is investing a "significant" amount in Scale AI and hiring the artificial intelligence (AI) company's young CEO Alexandr Wang. The investment, reportedly worth about $14 billion, will bring the 28-year-old tech founder on board to help with Meta's "superintelligence efforts." "Meta has finalized our strategic partnership and investment in Scale AI," Meta said in a statement. "As part of this, we will deepen the work we do together producing data for AI models and Alexandr Wang will join Meta to work on our superintelligence efforts." Scale AI, founded by Wang in 2016, provides data services for AI companies. Meta's massive investment values the firm at more than $29 billion. Wang noted in a message to staff that he would "never leave Scale behind" and will remain a member of the board of directors, "continuing to support Scale's mission and long-term vision." Jason Droege, Scale AI's chief strategy officer, will take over as interim CEO, according to a company press release. "When this opportunity first presented itself, my immediate reaction was uncertainty," Wang said in the message posted to Instagram on Thursday. "The idea of not being a Scalien was, frankly, unimaginable. But as I spent time truly considering it, I realized this was a deeply unique moment, not just for me, but for Scale as well." "As you've probably gathered from recent news, opportunities of this magnitude often come at a cost," Wang added. "In this instance, that cost is my departure." The new partnership comes as Meta seeks to build out a superintelligence lab, focused on creating AI that is smarter than humans -- a step further than the artificial general intelligence (AGI) sought by many tech and AI companies, according to The New York Times.

Meta Set to Throw Billions at Startup That Leads AI Data Market

Partnering with Scale could help Meta keep pace with AI rivals like Google, OpenAI Three months after the Chinese artificial intelligence developer DeepSeek upended the tech world with a model that rivaled America's best, a 28-year-old AI executive named Alexandr Wang came to Capitol Hill to tell policymakers what they needed to do to maintain US dominance. The US, Wang said at the April hearing, needs to establish a "national AI data reserve," supply enough power for data centers and avoid an onerous patchwork of state-level rules. Lawmakers welcomed his feedback. "It's good to see you again here in Washington," Republican Representative Neal Dunn of Florida said. "You're becoming a regular up here." Wang, the chief executive officer of Scale AI, may not be a household name in the same way OpenAI's Sam Altman has become. But he and his company have gained significant influence in tech and policy circles in recent years. Scale uses an army of contractors to label the data that tech firms such as Meta Platforms and OpenAI use to train and improve their AI models, and helps companies make custom AI applications. Increasingly, it's enlisting PhDs, nurses and other experts with advanced degrees to help develop more sophisticated models, according to a person familiar with the matter. Put simply: The three pillars of AI are chips, talent and data. And Scale is a dominant player in the last of those. Now, the startup's stature is set to grow even more. Meta is in talks to make a multibillion-dollar investment in Scale, Bloomberg News reported over the weekend. The financing may exceed $10 billion (roughly Rs. 85,533 crore) in value, making it one of the largest private company funding events of all time. The startup was valued at about $14 billion (roughly Rs. 1,19,753 crore) in 2024, as part of a funding round that included backing from Meta. In many ways, Scale's rise mirrors that of OpenAI. Both companies were founded roughly a decade ago and bet that the industry was then on the cusp of what Wang called an "inflection point of AI." Their CEOs, who are friends and briefly lived together, are both adept networkers and have served as faces of the AI sector before Congress. And OpenAI, too, has been on the receiving end of an 11-figure investment from a large tech firm. Scale's trajectory has shaped, and been shaped by, the AI boom that OpenAI unleashed. In its early years, Scale focused more on labeling images of cars, traffic lights and street signs to help train the models used to build self-driving cars. But it has since helped to annotate and curate the massive amounts of text data needed to build the so-called large language models that power chatbots like ChatGPT. These models learn by drawing patterns from the data and their respective labels. At times, that work has made Scale a lightning rod for criticisms about the unseen workforce in places such as Kenya and the Philippines that supports AI development. Scale has faced scrutiny for relying on thousands of contractors overseas who were paid relatively little to weed through reams of online data, with some saying they have suffered psychological trauma from the content they're asked to review. In a 2019 interview with Bloomberg, Wang said the company's contract workers earn "good" pay -- "in the 60th to 70th percentile of wages in their geography." Scale AI spokesperson Joe Osborne noted that the US Department of Labor recently dropped an investigation into the company's compliance with fair labor regulations. Scale's business has evolved. More tech firms have begun to experiment with using synthetic, AI-generated data to train AI systems, potentially reducing the need for some of the services Scale historically provided. However, the leading AI labs are also struggling to get enough high-quality training data to build more advanced AI systems that are capable of fielding complex tasks as well as, or better than, humans. To meet that need, Scale has increasingly turned to better-paid contractors with graduate degrees to improve AI systems. These experts participate in a process known as reinforcement learning, which rewards a system for correct answers and punishes it for incorrect responses. The experts who work with Scale are tasked with constructing tricky problems - tests, essentially - for the models to solve, according to a person familiar with the matter who asked not to be named because the information is private. As of early 2025, 12 percent of the company's pool of contributors who work on the process of improving these models had a PhD in fields such as molecular biology and more than 40 percent had a master's degree, law degree or MBA in their field, the person said. Much of this process is aimed at companies that want to use AI for medical and legal applications, the person said. One area of focus, for example, is getting AI models to better answer questions regarding tax law, which can differ greatly from country to country and even state to state. Bets like those are driving significant growth for the company. Scale generated about $870 million (roughly Rs. 7,441 crore) in revenue in 2024 and expects $2 billion in revenue this year, Bloomberg News reported in April. Scale has seen demand for its network of experts increase in the wake of DeepSeek, the person familiar with the matter said, as more companies invest in models that mimic human reasoning and carry out more complicated tasks. Scale has also deepened its relationship with the US government through defense deals. Wang, a China hawk, has cozied up to lawmakers on the hill who are concerned about China's ascendance in AI. And Michael Kratsios, a former executive at Scale, is now one of President Donald Trump's top tech aides, helping to steer US policy on AI. For Meta, partnering more deeply with Scale may simultaneously help it keep pace with AI rivals like Google and OpenAI, and also help it build deeper ties with the US government at a time when it's pushing more into defense tech. For Scale, a tie-up with Meta offers a powerful and deep-pocketed ally. It would also be a fitting full-circle moment for Wang. Shortly after launching Scale, Wang said he was asked by one venture capitalist when he knew he wanted to build a startup. In response, Wang said he "rattled off some silly answer about being inspired by The Social Network," the film about the founding of Facebook. © 2025 Bloomberg LP

Meta Invests Big in Startup Scale AI, Brings On Its CEO for AI Development Efforts

The move comes as Meta CEO Mark Zuckerberg has reportedly been frustrated with the Facebook parent's level of AI progress. Artificial intelligence startup Scale AI said it received a "significant new investment" from Meta (META) that values the company at more than $29 billion and sees its chief executive join the tech titan. CEO Alexandr Wang posted on X that he will leave his role at Scale to work on Meta's AI efforts, while remaining on the startup's board. The move comes as Meta CEO Mark Zuckerberg has reportedly been frustrated with the company's level of AI progress. Last month, The Wall Street Journal reported Meta was pushing back the launch of its latest Llama 4 large language model amid concerns about whether enough improvements had been made compared to previous iterations. To speed up development, Zuckerberg is reportedly working to build what has been referred to internally at Meta as a "superintelligence group" that will sit near him at Meta's headquarters in Menlo Park, Calif. Shares of Meta are little changed in recent trading. The stock is up 18% for 2025.

Google, Scale AI's Largest Customer, Said to Plan Split After Meta Deal

The company used Scale AI's technology for its Gemini AI platform Alphabet's Google, the largest customer of Scale AI, plans to cut ties with Scale after news broke that rival Meta is taking a 49% stake in the AI data-labeling startup, five sources familiar with the matter told Reuters. Google had planned to pay Scale AI about $200 million this year for the human-labeled training data that is crucial for developing technology, including the sophisticated AI models that power Gemini, its ChatGPT competitor, one of the sources said. The search giant already held conversations with several of Scale AI's rivals this week as it seeks to shift away much of that workload, sources added. Scale's loss of significant business comes as Meta takes a big stake in the company, valuing it at $29 billion. Scale was worth $14 billion before the deal. Scale AI intends to keep its business running while its CEO, Alexandr Wang, along with a few employees, move over to Meta. Since its core business is concentrated around a few customers, it could suffer greatly if it loses key customers like Google. In a statement, a Scale AI spokesperson said its business, which spans work with major companies and governments, remains strong, as it is committed to protecting customer data. The company declined to comment on specifics with Google. Scale AI raked in $870 million in revenue in 2024, and Google spent some $150 million on Scale AI's services last year, sources said. Other major tech companies that are customers of Scale's, including Microsoft, are also backing away. Elon Musk's xAI is also looking to exit, one of the sources said. OpenAI decided to pull back from Scale several months ago, according to sources familiar with the matter, though it spends far less money than Google. OpenAI's CFO said on Friday that the company will continue to work with Scale AI, as one of its many data vendors. Companies that compete with Meta in developing cutting-edge AI models are concerned that doing business with Scale could expose their research priorities and road map to a rival, five sources said. By contracting with Scale AI, customers often share proprietary data as well as prototype products for which Scale's workers are providing data-labeling services. With Meta now taking a 49% stake, AI companies are concerned that one of their chief rivals could gain knowledge about their business strategy and technical blueprints. Google, Microsoft and OpenAI declined to comment. xAI did not respond to a request for comment. Rivals See Openings The bulk of Scale AI's revenue comes from charging generative AI model makers for providing access to a network of human trainers with specialized knowledge - from historians to scientists, some with doctorate degrees. The humans annotate complex datasets that are used to "post-train" AI models, and as AI models have become smarter, the demand for the sophisticated human-provided examples has surged, and one annotation could cost as much as $100. Scale also does data-labeling for enterprises like self-driving car companies and the U.S. government, which are likely to stay, according to the sources. But its biggest money-maker is in partnering with generative AI model makers, the sources said. Google had already sought to diversify its data service providers for more than a year, three of the sources said. But Meta's moves this week have led Google to seek to move off Scale AI on all its key contracts, the sources added. Because of the way data-labeling contracts are structured, that process could happen quickly, two sources said. This will provide an opening for Scale AI's rivals to jump in. "The Meta-Scale deal marks a turning point," said Jonathan Siddharth, CEO of Turing, a Scale AI competitor. "Leading AI labs are realizing neutrality is no longer optional, it's essential." Labelbox, another competitor, will "probably generate hundreds of millions of new revenue" by the end of the year from customers fleeing Scale, its CEO, Manu Sharma, told Reuters. Handshake, a competitor focusing on building a network of PhDs and experts, saw a surge of workload from top AI labs that compete with Meta. "Our demand has tripled overnight after the news," said Garrett Lord, CEO at Handshake. Many AI labs now want to hire in-house data-labelers, which allows their data to remain secure, said Brendan Foody, CEO of Mercor, a startup that in addition to competing directly with Scale AI also builds technology around being able to recruit and vet candidates in an automated way, enabling AI labs to scale up their data labeling operations quickly. Founded in 2016, Scale AI provides vast amounts of labeled data or curated training data, which is crucial for developing sophisticated tools such as OpenAI's ChatGPT. The Meta deal will be a boon for Scale AI's investors including Accel and Index Ventures, as well as its current and former employees. As part of the deal, Scale AI's CEO, Wang, will take a top position leading Meta's AI efforts. Meta is fighting the perception that it may have fallen behind in the AI race after its initial set of Llama 4 large language models released in April fell short of performance expectations. © Thomson Reuters 2025

Meta's Zuckerberg Said to be Hiring for New 'Superintelligence' AI Team

OpenAI is also looking to attract investment in a bid to develop AGI Mark Zuckerberg, the billionaire CEO of Meta Platforms is setting up a team of experts to achieve so-called "artificial general intelligence" (AGI), or machines that can match or surpass human capabilities, Bloomberg News reported on Tuesday. Zuckerberg is building the new AI team in tandem with a reported investment of over $10 billion (roughly Rs. 85,563 crore) in Scale AI, Bloomberg News said citing sources, adding that Scale AI founder Alexandr Wang was expected to join the AGI group after a deal is done. Reuters could not immediately verify the Bloomberg report. Meta did not immediately respond to a request for comment outside regular business hours. Zuckerberg's plans to personally recruit around 50 people, including a new head of AI research for the AGI team is driven partly by frustration over the performance and reception of Meta's latest large language model, Llama 4, Bloomberg News reported. Last month, Meta delayed the release of its flagship "Behemoth" AI model due to concerns about its capabilities, the Wall Street Journal reported. Rivals like OpenAI have also been looking to make changes to attract further investment in a bid to develop AGI. © Thomson Reuters 2025

Meta Eyes Scale AI, a Quiet Data Powerhouse, in $10B A.I. Push

Scale AI's collaboration with Meta accelerates the push for artificial general intelligence. Scale AI, a startup specializing in providing high-quality data for training A.I. systems, is making inroads into the Big Tech-dominated A.I. race. Bloomberg reported on Sunday (June 8) that Meta is in talks to invest more than $10 billion in the San Francisco-based company, a deal that could be one of the largest private company financing rounds ever. If finalized, it would also significantly increase the wealth of Scale AI's young founders, particularly CEO Alexandr Wang. Sign Up For Our Daily Newsletter Sign Up Thank you for signing up! By clicking submit, you agree to our <a href="http://observermedia.com/terms">terms of service</a> and acknowledge we may use your information to send you emails, product samples, and promotions on this website and other properties. You can opt out anytime. See all of our newsletters As part of the deal, which hasn't been officially announced, Meta is reportedly recruiting Wang to lead a new internal research lab. This team will focus on advanced A.I. technologies, such as artificial general intelligence (A.G.I.), with plans to integrate A.G.I. into products like Meta A.I. and Ray-Ban Meta A.I. Glasses. The lab is expected to hire around 50 experts in the field. Meta and Scale AI did not respond to requests for comment from Observer. Meta's collaboration with Scale AI coincides with the company's plan to double down on A.I. in 2025, entering a full-throttle race for A.G.I. with other Silicon Valley giants. Meta plans to invest up to $72 billion in A.I. over the next year, significantly expanding its chip stockpile, data center capacity and A.I. product offerings. "This is going to be intense," Zuckerberg said in January, describing 2025 as a pivotal year to "set the course for the future." In recent months, Wang has become an increasingly prominent figure in Washington as the U.S. strives to maintain its lead in A.I. Beyond warning about the rise of Chinese A.I. startup DeepSeek, he appealed directly to the Trump administration for A.I. investments and, in April, testified before Congress, urging the government to establish a national A.I. data reserve. Wang's focus on federal strategies is rooted in his upbringing in Los Alamos, N.M., where he was raised by two weapons physicists. After stints at tech ventures Addepar and Quora, Wang -- much like Mark Zuckerberg -- dropped out of university to start his own company. In 2016, he co-founded Scale AI with Lucy Guo, another former Quora staffer who left the company in 2018. What to know about Scale AI and Alexandr Wang Scale AI recruits large teams of human contractors worldwide to label text, image and video data for fine-tuning A.I. systems. The company initially focused on autonomous vehicles before pivoting to generative models. With contributors in around 9,000 locations globally, Scale AI has faced labor practice criticism, including allegations of wage theft and worker misclassification. Earlier this year, the U.S. Department of Labor closed a nearly year-long investigation into its employee practices. As A.I. companies struggle to find high-quality data sources for their increasingly sophisticated models, Scale AI has shifted focus to expert contributors -- such as doctors, lawyers and Ph.D.-holders -- to provide more specialized data. Its clients include major players like OpenAI, Uber, and government agencies such as the U.S. Department of Defense (DoD). Scale AI's work with the DoD includes developing an evaluation framework for A.I. systems and integrating A.I. agents into military and operational planning. Beyond Washington, Wang maintains close relationships with influential figures across Silicon Valley. He has been friends with OpenAI CEO Sam Altman for years, having roomed with him during the Covid-19 pandemic, and launched Scale AI through Y Combinator, the startup accelerator once led by Altman. Both OpenAI and Meta, along with other investors like Nvidia and Amazon, backed Scale AI during a 2024 funding round that valued the startup at nearly $14 billion. Scale AI's 2024 revenue was reported at $870 million and is projected to more than double to $2 billion this year. A partnership with Scale AI would position Meta alongside Big Tech rivals that have made similar moves. For instance, Microsoft invested $13 billion in OpenAI, while Amazon and Google have poured billions into A.I. startup Anthropic.

Scale AI CEO Alexandr Wang Leaves to Join Meta Following $14.3B Deal

Meta invests billions in Scale AI and brings on Wang as it intensifies the race for A.I. dominance. As Meta intensifies its A.I. race against Big Tech rivals, it's recruiting Alexandr Wang, founder and CEO of Scale AI, to strengthen its efforts. Wang, 28, announced yesterday (June 12) that he will step down as CEO to join a newly formed A.I. team within Meta. The announcement came after Meta acquired 49 percent of Scale AI in a deal that valued the startup at $29 billion, which Wang confirmed in a memo to employees. Sign Up For Our Daily Newsletter Sign Up Thank you for signing up! By clicking submit, you agree to our <a href="http://observermedia.com/terms">terms of service</a> and acknowledge we may use your information to send you emails, product samples, and promotions on this website and other properties. You can opt out anytime. See all of our newsletters "As you've probably gathered from recent news, opportunities of this magnitude often come at a cost. In this instance, that cost is my departure," he wrote, while thanking his team for accelerating "the development of what may be the most important technology in human history." Wang will remain involved with Scale AI as a board member and is expected to bring several employees with him to Meta. He has led the company since co-founding it in 2016 to supply high-quality labeled data -- sourced through human contractors -- for training A.I. systems. Meta's investment in Scale AI will reportedly total $14.3 billion, making it the Meta's second largest acquisition after its $19 billion purchase of WhatsApp in 2014. The deal will give Meta a 49 percent non-voting stake in the startup. "Meta has finalized our strategic partnership and investment in Scale AI," the company said in a statement to Observer. "As part of this, we will deepen the work we do together for A.I. models, and Alexandr Wang will join Meta to work on our superintelligence efforts." Superintelligence refers to a form of A.I. that surpasses human intelligence and even goes beyond artificial general intelligence (A.G.I.), a benchmark that has yet to be reached. Wang's new role at Meta will place him at the center of a roughly 50-person team focused on achieving that breakthrough. Meta's partnership with Scale AI mirrors strategies pursued by its competitors, including Microsoft's $13 billion alliance with OpenAI and the investments Amazon and Google have made in Anthropic. Meta, under Mark Zuckerberg's leadership, is prepared to spend up to $72 billion on A.I. development this year, with funding allocated to infrastructure, chip procurement and other core initiatives. Although Wang now finds himself at the forefront of Meta's A.I. ambitions, he admitted he was initially uncertain about the move. "When this opportunity first presented itself, my immediate reaction was uncertainty," he told employees. "But as I spent time truly considering it, I realized this was a deeply unique moment, not just for me, but for Scale as well." Wang added that proceeds from Meta's investment will be distributed to Scale AI's shareholders and vested equity holders. Jason Droege, Scale AI's current chief strategy officer and a former executive at Uber and Axon, will serve as interim CEO following Wang's departure. "Meta's new investment and our expanded commercial agreement are a testament to the incredible work and dedication of the entire Scale team -- and to the tremendous potential that lies ahead," Droege said in a statement.

Meta in talks for Scale AI investment that could top $10 billion

This would be Meta's biggest ever external AI investment, and a rare move for the company. The social media giant has before now mostly depended on its in-house research, plus a more open development strategy, to make improvements in its AI technology. Meanwhile, Big Tech peers have invested heavily: Microsoft has put more than $13 billion into OpenAI while both Amazon.com Inc. and Alphabet Inc. have put billions into rival Anthropic.Meta Platforms Inc. is in talks to make a multibillion-dollar investment into artificial intelligence startup Scale AI, according to people familiar with the matter. The financing could exceed $10 billion in value, some of the people said, making it one of the largest private company funding events of all time. The terms of the deal are not finalized and could still change, according to the people, who asked not to be identified discussing private information. A representative for Scale did not immediately respond to requests for comment. Meta declined to comment. Scale AI, whose customers include Microsoft Corp. and OpenAI, provides data labeling services to help companies train machine-learning models and has become a key beneficiary of the generative AI boom. The startup was last valued at about $14 billion in 2024, in a funding round that included backing from Meta and Microsoft. Earlier this year, Bloomberg reported that Scale was in talks for a tender offer that would value it at $25 billion. This would be Meta's biggest ever external AI investment, and a rare move for the company. The social media giant has before now mostly depended on its in-house research, plus a more open development strategy, to make improvements in its AI technology. Meanwhile, Big Tech peers have invested heavily: Microsoft has put more than $13 billion into OpenAI while both Amazon.com Inc. and Alphabet Inc. have put billions into rival Anthropic. Part of those companies' investments have been through credits to use their computing power. Meta doesn't have a cloud business, and it's unclear what format Meta's investment will take. Chief Executive Officer Mark Zuckerberg has made AI Meta's top priority, and said in January that the company would spend as much as $65 billion on related projects this year. The company's push includes an effort to make Llama the industry standard worldwide. Meta's AI chatbot -- already available on Facebook, Instagram and WhatsApp -- is used by 1 billion people per month. Scale, co-founded in 2016 by CEO Alexandr Wang, has been growing quickly: The startup generated revenue of $870 million last year and expects sales to more than double to $2 billion in 2025, Bloomberg previously reported. Scale plays a key role in making AI data available for companies. Because AI is only as good as the data that goes into it, Scale uses scads of contract workers to tidy up and tag images, text and other data that can then be used for AI training. Scale and Meta share an interest in defense tech. Last week, Meta announced a new partnership with defense contractor Anduril Industries Inc. to develop products for the US military, including an AI-powered helmet with virtual and augmented reality features. Meta has also granted approval for US government agencies and defense contractors to use its AI models. The company is already partnering with Scale on a program called Defense Llama -- a version of Meta's Llama large language model intended for military use. Scale has increasingly been working with the US government to develop AI for defense purposes. Earlier this year the startup said it won a contract with the Defense Department to work on AI agent technology. The company called the contract "a significant milestone in military advancement."

Early investors await Meta-Scale deal windfall: Report

Peter Thiel's Founders Fund, Chase Coleman's Tiger Global, and venture capital firm Accel are among investors expected to gain from the deal. Meta is planning to invest $15 billion in Scale AI, paying between $14 and $15 a share. Some of the earliest investors in Scale AI paid 1 to 3 cents per share.Meta is planning to invest $15 billion in Scale AI, beefing up its artificial intelligence (AI) talent pool and ensuring hefty returns for some early investors in both companies, according to The Information. Investors set to gain from the deal include Peter Thiel's Founders Fund, Chase Coleman's Tiger Global and venture capital firm Accel. While the deal is yet to be finalised, Meta is expected to pay between $14 and $15 a share. Some of the earliest investors in Scale AI paid 1 to 3 cents per share, including angel investor Paige Craig's Outlander VC, Y Combinator, angel investors Brockman and Nat Friedman, according to its corporate Delaware charter. Accel is the largest outside investor in Scale with a 20% stake, The Information reported, citing people in the know. It is looking at a $2 billion to $3 billion windfall from the Meta deal against an unknown amount of investment. Tiger Global is another likely winner, with its $200 million investment turning into $1 billion. Notably, both Accel and Tiger Global had reaped substantial returns from their investments in Facebook. Index Ventures, Greenoaks, Coatue Management, Spark Capital, Dragoneer Investment Group and Thrive Capital are also among venture capital firms that can expect to gain big from the deal. Other potential big winners include early angel investors such as Outlander VC and current OpenAI president Greg Brockman, The Information reported. Meta would acquire a 49% stake in Scale, which would then use most of the funds from the sale to pay a dividend to its shareholders, including current and former employees as well as venture capital investors. Once finalised, this would be the biggest external AI investment by Meta. Existing Scale shareholders would keep their shares, while Meta would heavily dilute their ownership percentage. Meta beefs up AI talent pool Scale's chief executive officer Alexandr Wang and other employees join Meta's workforce if the multibillion-dollar deal comes through. The startup, which counts OpenAI and Google among its clients, is expected to name chief strategy officer Jason Droege as its new CEO. Scale labels the data that tech firms, such as Meta Platforms Inc. and OpenAI, use to train and improve their AI models, and helps companies make custom AI applications. It has been enlisting PhDs, nurses and other experts with advanced degrees to help develop more sophisticated models, Bloomberg reported. Meanwhile, Mark Zuckerberg is personally picking researchers for a 50-strong 'superintelligence' team that will work on artificial general intelligence (AGI). Meta has been poaching top talent from more successful artificial intelligence (AI) rivals OpenAI and Google, according to reports. The latest fillip to shore up its AI research bench strength partly arises from the frustration over tepid performance and reception of Meta's Llama 4 large language model (LLM).

Meta set to throw billions at startup that leads AI data market

Scale AI, led by Alexandr Wang, has become a key player in the AI industry by providing crucial data labeling services. Meta is considering a multibillion-dollar investment in Scale, potentially exceeding $10 billion. Scale's growth mirrors OpenAI's, with both companies benefiting from the AI boom and their CEOs navigating the tech and policy landscape.Three months after the Chinese artificial intelligence developer DeepSeek upended the tech world with a model that rivaled America's best, a 28-year-old AI executive named Alexandr Wang came to Capitol Hill to tell policymakers what they needed to do to maintain US dominance. The US, Wang said at the April hearing, needs to establish a "national AI data reserve," supply enough power for data centers and avoid an onerous patchwork of state-level rules. Lawmakers welcomed his feedback. "It's good to see you again here in Washington," Republican Representative Neal Dunn of Florida said. "You're becoming a regular up here." Wang, the chief executive officer of Scale AI, may not be a household name in the same way OpenAI's Sam Altman has become. But he and his company have gained significant influence in tech and policy circles in recent years. Scale uses an army of contractors to label the data that tech firms such as Meta Platforms Inc. and OpenAI use to train and improve their AI models, and helps companies make custom AI applications. Increasingly, it's enlisting PhDs, nurses and other experts with advanced degrees to help develop more sophisticated models, according to a person familiar with the matter. Put simply: The three pillars of AI are chips, talent and data. And Scale is a dominant player in the last of those. Now, the startup's stature is set to grow even more. Meta is in talks to make a multibillion-dollar investment in Scale, Bloomberg News reported over the weekend. The financing may exceed $10 billion in value, making it one of the largest private company funding events of all time. The startup was valued at about $14 billion in 2024, as part of a funding round that included backing from Meta. In many ways, Scale's rise mirrors that of OpenAI. Both companies were founded roughly a decade ago and bet that the industry was then on the cusp of what Wang called an "inflection point of AI." Their CEOs, who are friends and briefly lived together, are both adept networkers and have served as faces of the AI sector before Congress. And OpenAI, too, has been on the receiving end of an 11-figure investment from a large tech firm. Scale's trajectory has shaped, and been shaped by, the AI boom that OpenAI unleashed. In its early years, Scale focused more on labeling images of cars, traffic lights and street signs to help train the models used to build self-driving cars. But it has since helped to annotate and curate the massive amounts of text data needed to build the so-called large language models that power chatbots like ChatGPT. These models learn by drawing patterns from the data and their respective labels. At times, that work has made Scale a lightning rod for criticisms about the unseen workforce in places such as Kenya and the Philippines that supports AI development. Scale has faced scrutiny for relying on thousands of contractors overseas who were paid relatively little to weed through reams of online data, with some saying they have suffered psychological trauma from the content they're asked to review. In a 2019 interview with Bloomberg, Wang said the company's contract workers earn "good" pay -- "in the 60th to 70th percentile of wages in their geography." Scale AI spokesperson Joe Osborne noted that the U.S. Department of Labor recently dropped an investigation into the company's compliance with fair labor regulations. Scale's business has evolved. More tech firms have begun to experiment with using synthetic, AI-generated data to train AI systems, potentially reducing the need for some of the services Scale historically provided. However, the leading AI labs are also struggling to get enough high-quality training data to build more advanced AI systems that are capable of fielding complex tasks as well as, or better than, humans. To meet that need, Scale has increasingly turned to better-paid contractors with graduate degrees to improve AI systems. These experts participate in a process known as reinforcement learning, which rewards a system for correct answers and punishes it for incorrect responses. The experts who work with Scale are tasked with constructing tricky problems - tests, essentially - for the models to solve, according to a person familiar with the matter who asked not to be named because the information is private. As of early 2025, 12% of the company's pool of contributors who work on the process of improving these models had a PhD in fields such as molecular biology and more than 40% had a master's degree, law degree or MBA in their field, the person said. Much of this process is aimed at companies that want to use AI for medical and legal applications, the person said. One area of focus, for example, is getting AI models to better answer questions regarding tax law, which can differ greatly from country to country and even state to state. Bets like those are driving significant growth for the company. Scale generated about $870 million in revenue in 2024 and expects $2 billion in revenue this year, Bloomberg News reported in April. Scale has seen demand for its network of experts increase in the wake of DeepSeek, the person familiar with the matter said, as more companies invest in models that mimic human reasoning and carry out more complicated tasks. Scale has also deepened its relationship with the US government through defense deals. Wang, a China hawk, has cozied up to lawmakers on the hill who are concerned about China's ascendance in AI. And Michael Kratsios, a former executive at Scale, is now one of President Donald Trump's top tech aides, helping to steer US policy on AI. For Meta, partnering more deeply with Scale may simultaneously help it keep pace with AI rivals like Google and OpenAI, and also help it build deeper ties with the US government at a time when it's pushing more into defense tech. For Scale, a tie-up with Meta offers a powerful and deep-pocketed ally. It would also be a fitting full-circle moment for Wang. Shortly after launching Scale, Wang said he was asked by one venture capitalist when he knew he wanted to build a startup. In response, Wang said he "rattled off some silly answer about being inspired by The Social Network," the film about the founding of Facebook.

Meta to pay nearly $15 billion for Scale AI stake: Report

Meta Platforms reportedly agreed to acquire a 49% stake in AI startup Scale AI for $14.8 billion. This move aims to boost Meta's AI efforts, placing Scale AI CEO Alexandr Wang in a top position to lead a new "superintelligence" lab. Scale AI, valued at $13.8 billion in 2024, provides crucial labeled data for AI development and generated $870 million in revenue last year, projected to exceed $2 billion in 2025.Meta Platforms has agreed to take a 49% stake in artificial intelligence startup Scale AI for $14.8 billion, The Information reported on Tuesday, citing two people familiar with the matter. Founded in 2016, Scale AI provides vast amounts of labeled data or curated training data, which is crucial for developing sophisticated tools such as OpenAI's ChatGPT. The deal, which has not been finalized yet, appears to be beneficial for Scale AI's investors, including Accel, Index Ventures, Founders Fund and Greenoaks Capital, as well as its current and former employees, the report said. Meta, Scale AI and the startup's investors did not immediately respond to Reuters' requests for comment. As part of the deal, Scale AI CEO Alexandr Wang will take a top position inside Meta, leading a new "superintelligence" lab, according to the report. Meta CEO Mark Zuckerberg has been actively recruiting top AI researchers to boost the company's AI efforts, the report said. The company is fighting the perception that it may have fallen behind in the AI race after its initial set of Llama 4 large language models released in April fell short of performance expectations. Meta delayed the release of its flagship "Behemoth" AI model due to concerns about its capabilities, the Wall Street Journal reported last month. The company is also facing antitrust concerns related to its acquisitions of Instagram and WhatsApp. According to The Information report, the structure for the potential deal with Scale AI could be designed to avoid more regulatory scrutiny. Scale AI was valued at $13.8 billion in a funding round last spring. It generated about $870 million in revenue in 2024 and expects more than $2 billion this year, the report said. The company counts AI firms OpenAI and Cohere as well as tech giants Microsoft, Meta and Cisco Systems among its customers, according to its website.

Meta finalises investment in Scale AI, valuing startup at $29 billion

Meta has finalised an investment of $14.3 billion in Scale AI, valuing the startup at over $29 billion. Scale CEO Alexandr Wang will join Meta's new AGI-focused unit, with Jason Droege as interim CEO. The deal, Meta's second-largest ever, strengthens its AI ambitions and offers insights into rival labs' data strategies.Meta Platforms has finalised an investment in Scale AI that values the startup at over $29 billion, Scale AI said on Thursday. Two sources familiar with the matter said that Meta's investment in Scale AI amounts to $14.3 billion. The sources said that Scale CEO and co-founder Alexandr Wang will join a new "superintelligence" unit inside Meta to achieve artificial general intelligence (AGI), a term that refers to machines that can match or surpass human capabilities. Scale's chief strategy officer, Jason Droege, will serve as its interim CEO, Scale AI added. By poaching Wang, who does not have formal experience in frontier AI research, Meta CEO Mark Zuckerberg is betting that Meta's AI efforts can be turned around by an adept business leader more in the mold of OpenAI's Sam Altman than the research scientists at the helm of most competing labs. The deal ranks as Meta's second-largest ever after its $19 billion buyout of WhatsApp. Since many of those labs have contracted Scale for data services, Zuckerberg could also obtain an inside track into his rivals' priorities around data, one of the key ingredients for developing today's AI models. Scale was valued at nearly $14 billion in a May 2024 funding round where the company raised $1 billion from backers including tech giants Nvidia, Amazon and Meta. Founded in 2016, Scale AI provides vast amounts of accurately labelled data, which is pivotal for training sophisticated tools like OpenAI's ChatGPT. To do so, Scale set up subsidiary platforms such as Remotasks and Outlier to recruit and manage gig-workers who manually label the data. Wang, the 28-year-old co-founder, has steered the company to provide data labelling services across the buzzy tech sectors of the moment, from autonomous vehicles several years ago to generative AI today.

OpenAI to continue working with Scale AI after Meta deal

This decision signals OpenAI's confidence in Scale's services, even as the latter expands relationships with major AI competitors like Meta, intensifying competition in the AI ecosystem.OpenAI plans to continue working with Scale AI after rival Meta on Friday agreed to take a 49% stake in the artificial intelligence startup for $14.8 billion, OpenAI's CFO Sarah Friar told the VivaTech conference in Paris. Scale AI provides vast amounts of labelled or curated training data, which is crucial for developing sophisticated tools such as OpenAI's ChatGPT. "We don't want to ice the ecosystem because acquisitions are going to happen," she said. "And if we ice each other out, I think we're actually going to slow the pace of innovation." Microsoft-backed OpenAI's ChatGPT AI language models rival those of Meta's Llama family of models. Scale CEO Alexandr Wang will now join Meta to lead its new superintelligence unit. "We don't just buy from Scale, Friar said. "We work with many vendors on the data front." "As models have gotten smarter, you're going into a place where you need real expertise ... we have academics and experts telling us that they are finding novel things in their space." Sophisticated updates to AI models in the fiercely competitive arena are now demanding a rapidly expanding network of human trainers who have specialised knowledge - from historians to scientists, some with doctorate degrees.

From Scale AI to Meta's AI boss: Who is Alexandr Wang, the 28-year-old MIT dropout gunning for OpenAI?

Meta has struck a $15 billion deal for a 49% stake in Scale AI, a fast-growing data-labelling startup led by 28-year-old CEO Alexandr Wang. The move puts Wang -- once the world's youngest self-made billionaire -- at the helm of Meta's new superintelligence research unit. Wang's appointment signals a strategic pivot by Meta to regain its competitive edge in artificial intelligence, as it aims to outpace rivals OpenAI, Google, and Microsoft by blending business acumen with ambitious AI goals.Meta Platforms is investing $15 billion for a 49% stake in Scale AI, a data-labelling startup now valued at $29 billion. The deal, confirmed by both companies on Thursday, marks a strategic shift for Meta as it races to reclaim its edge in artificial intelligence. The main draw? Alexandr Wang. The 28-year-old MIT dropout and CEO of Scale AI will join Meta to lead its newly-formed superintelligence team. This unit is tasked with building systems that push beyond today's artificial intelligence capabilities -- towards artificial superintelligence (ASI). "We will deepen the work we do together producing data for AI models and Alexandr Wang will join Meta to work on our superintelligence efforts," Meta said in a statement, as reported by Reuters. Though Meta will not take a seat on Scale AI's board, the deal will see a few of Scale's 1,500 employees join Wang at Meta. Wang will remain a board member at Scale. Wang's background is far from typical. Born in Los Alamos, New Mexico to Chinese immigrant physicists, he entered the tech world early. He worked at Quora before dropping out of MIT after his freshman year. In 2016, alongside Lucy Guo, he co-founded Scale AI via startup accelerator Y Combinator. "Long-term, we want to power any human-powered process for any company," Wang told the YC blog in 2016. At just 24, he became the world's youngest self-made billionaire. Though Guo exited the startup a few years later, Wang built Scale AI into a data backbone for many of the world's leading AI systems. He's raised over $680 million, including $100 million from Peter Thiel's Founders Fund. Today, Forbes estimates his personal net worth at $3.6 billion. "Focus on building the business and then the rest will kind of take care of itself," he told Business Insider in 2020. Wang has become a familiar face in Washington, frequently engaging with lawmakers on the national security implications of AI. In 2018, a visit to China convinced him that America's future in warfare would hinge on AI leadership. "The race for AI global leadership is well underway, and our nation's ability to efficiently adopt and implement AI will define the future of warfare," Wang said in public testimony. Founded in 2016, Scale AI helps train frontier AI models by offering large volumes of labelled data. Its platforms -- Remotasks and Outlier -- enlist gig workers to annotate massive datasets. This labelled data is critical for training AI systems like ChatGPT. The company began by serving autonomous vehicle clients such as Toyota, Honda, and Waymo. It has since expanded to support OpenAI, Microsoft, and even the US government, which uses its services to analyse satellite imagery from Ukraine. Scale's revenues in 2024 hit $870 million and are projected to more than double to $2 billion in 2025. Bloomberg reports this would push its valuation to $25 billion. Yet the startup's rapid ascent hasn't been without controversy. Investigations have highlighted harsh working conditions for its offshore gig workforce, who are paid as little as $1 per hour. These workers are primarily based in countries such as Kenya, the Philippines, and India. This isn't just an investment -- it's a statement. With this deal, Meta is signalling a departure from the traditional research-led approach it once championed. Internal challenges, including high-profile exits and delayed model releases, have weighed on Meta's AI progress. The company's LLaMA open-source models were meant to disrupt the industry, but lukewarm adoption and team churn have slowed momentum. Meta's long-time AI chief, Yann LeCun, remains a key figure. Yet his scepticism about large language models (LLMs) as a path to artificial general intelligence (AGI) has reportedly diverged from mainstream Silicon Valley thinking. By bringing in Wang -- who built Scale into a billion-dollar business without a research pedigree -- CEO Mark Zuckerberg is now betting on a different kind of leadership. A business mind like Sam Altman's, rather than a research purist. Meta is reportedly luring talent from OpenAI and Google with seven to nine-figure pay packages to staff its 50-person superintelligence lab. "This was a deeply unique moment": Wang steps into new role In a message to employees, Wang acknowledged the emotional weight of leaving Scale. "The idea of not being a Scalien was, frankly, unimaginable. But as I spent time truly considering it, I realized this was a deeply unique moment, not just for me, but for Scale as well," he wrote. He assured Scale's staff that proceeds from Meta's investment would go to shareholders and vested equity holders. At Meta, Wang will lead an ambitious mission: to build AI that not only catches up to its rivals but moves beyond them. Superintelligence remains a theoretical concept -- but with Wang at the helm, Meta is making a $15 billion wager that it can become reality.

Meta's $14.8 billion Scale AI deal latest test of AI partnerships

Unlike an acquisition or a transaction that would give Meta a controlling stake, the deal does not require a review by US antitrust regulators. However, they could probe the deal if they believe it was structured to avoid those requirements or harm competition. Facebook owner Meta's $14.8 billion investment in Scale AI and hiring of the data-labeling startup's CEO will test how the Trump administration views so-called acquihire deals, which some have criticized as an attempt to evade regulatory scrutiny. The deal, announced on Thursday, was Meta's second-largest investment to date. It gives the owner of Facebook a 49% nonvoting stake in Scale AI, which uses gig workers to manually label data and includes among its customers Meta competitors Microsoft and ChatGPT creator OpenAI. Unlike an acquisition or a transaction that would give Meta a controlling stake, the deal does not require a review by US antitrust regulators. However, they could probe the deal if they believe it was structured to avoid those requirements or harm competition. The deal appeared to be structured to avoid potential pitfalls, such as cutting off competitors' access to Scale's services or giving Meta an inside view into rivals' operations - though Reuters exclusively reported on Friday that Alphabet's Google has decided to sever ties with Scale in light of Meta's stake, and other customers are looking at taking a step back. In a statement, a Scale AI spokesperson said its business, which spans work with major companies and governments, remains strong, as it is committed to protecting customer data. The company declined to comment on specifics with Google. Alexandr Wang, Scale's 28-year-old CEO who is coming to Meta as part of the deal, will remain on Scale's board but will have appropriate restrictions placed around his access to information, two sources familiar with the move confirmed. Large tech companies likely perceive the regulatory environment for AI partnerships as easier to navigate under President Donald Trump than under former President Joe Biden, said William Kovacic, director of the competition law center at George Washington University. Trump's antitrust enforcers have said they do not want to regulate how AI develops, but have also displayed a suspicion of large tech platforms, he added. "That would lead me to think they will keep looking carefully at what the firms do. It does not necessarily dictate that they will intervene in a way that would discourage the relationships," Kovacic said. Federal Trade Commission probes into past "aquihire" deals appear to be at a standstill. Under the Biden administration, the FTC opened inquiries into Amazon's deal to hire top executives and researchers from AI startup Adept, and Microsoft's $650 million deal with Inflection AI. The latter allowed Microsoft to use Inflection's models and hire most of the startup's staff, including its co-founders. Amazon's deal closed without further action from the regulator, a source familiar with the matter confirmed. And, more than a year after its initial inquiry, the FTC has so far taken no enforcement action against Microsoft over Inflection, though a larger probe over practices at the software giant is ongoing. A spokesperson for the FTC declined to comment on Friday. David Olson, a professor who teaches antitrust law at Boston College Law School, said it was smart of Meta to take a minority nonvoting stake. "I think that does give them a lot of protection if someone comes after them," he said, adding that it was still possible that the FTC would want to review the agreement. The Meta deal has its skeptics. US Senator Elizabeth Warren, a Democrat from Massachusetts who is probing AI partnerships involving Microsoft and Google, said Meta's investment should be scrutinized. "Meta can call this deal whatever it wants - but if it violates federal law because it unlawfully squashes competition or makes it easier for Meta to illegally dominate, antitrust enforcers should investigate and block it," she said in a statement on Friday. While Meta faces its own monopoly lawsuit by the FTC, it remains to be seen whether the agency will have any questions about its Scale investment. The US Department of Justice's antitrust division, led by former JD Vance adviser Gail Slater, recently started looking into whether Google's partnership with chatbot creator Character.AI was designed to evade antitrust review, Bloomberg News reported. The DOJ is separately seeking to make Google give it advance notice of new AI investments as part of a proposal to curb the company's dominance in online search.

Google, Scale AI's largest customer, plans split after Meta deal

Google had planned to pay Scale AI about $200 million this year for the human-labeled training data that is crucial for developing technology, including the sophisticated AI models that power Gemini, its ChatGPT competitor. The search giant already held conversations with several of Scale AI's rivals this week as it seeks to shift away much of that workload.Alphabet's Google, the largest customer of Scale AI, plans to cut ties with Scale after news broke that rival Meta is taking a 49% stake in the AI data-labeling startup, five sources familiar with the matter told Reuters. Google had planned to pay Scale AI about $200 million this year for the human-labeled training data that is crucial for developing technology, including the sophisticated AI models that power Gemini, its ChatGPT competitor, one of the sources said. The search giant already held conversations with several of Scale AI's rivals this week as it seeks to shift away much of that workload, sources added. Scale's loss of significant business comes as Meta takes a big stake in the company, valuing it at $29 billion. Scale was worth $14 billion before the deal. Scale AI intends to keep its business running while its CEO, Alexandr Wang, along with a few employees, move over to Meta. Since its core business is concentrated around a few customers, it could suffer greatly if it loses key customers like Google. In a statement, a Scale AI spokesperson said its business, which spans work with major companies and governments, remains strong, as it is committed to protecting customer data. The company declined to comment on specifics with Google. Scale AI raked in $870 million in revenue in 2024, and Google spent some $150 million on Scale AI's services last year, sources said. Other major tech companies that are customers of Scale's, including Microsoft, are also backing away. Elon Musk's xAI is also looking to exit, one of the sources said. OpenAI decided to pull back from Scale several months ago, according to sources familiar with the matter, though it spends far less money than Google. OpenAI's CFO that the company will continue to work with Scale AI, as one of its many data vendors. Companies that compete with Meta in developing cutting-edge AI models are concerned that doing business with Scale could expose their research priorities and road map to a rival, five sources said. By contracting with Scale AI, customers often share proprietary data as well as prototype products for which Scale's workers are providing data-labeling services. With Meta now taking a 49% stake, AI companies are concerned that one of their chief rivals could gain knowledge about their business strategy and technical blueprints. Google, Microsoft and OpenAI declined to comment. xAI did not respond to a request for comment. Rivals see openings The bulk of Scale AI's revenue comes from charging generative AI model makers for providing access to a network of human trainers with specialized knowledge - from historians to scientists, some with doctorate degrees. The humans annotate complex datasets that are used to "post-train" AI models, and as AI models have become smarter, the demand for the sophisticated human-provided examples has surged, and one annotation could cost as much as $100. Scale also does data-labeling for enterprises like self-driving car companies and the US government, which are likely to stay, according to the sources. But its biggest money-maker is in partnering with generative AI model makers, the sources said. Google had already sought to diversify its data service providers for more than a year, three of the sources said. But Meta's moves this week have led Google to seek to move off Scale AI on all its key contracts, the sources added. Because of the way data-labeling contracts are structured, that process could happen quickly, two sources said. This will provide an opening for Scale AI's rivals to jump in. "The Meta-Scale deal marks a turning point," said Jonathan Siddharth, CEO of Turing, a Scale AI competitor. "Leading AI labs are realizing neutrality is no longer optional, it's essential." Labelbox, another competitor, will "probably generate hundreds of millions of new revenue" by the end of the year from customers fleeing Scale, its CEO, Manu Sharma, told Reuters. Handshake, a competitor focusing on building a network of PhDs and experts, saw a surge of workload from top AI labs that compete with Meta. "Our demand has tripled overnight after the news," said Garrett Lord, CEO at Handshake. Many AI labs now want to hire in-house data-labelers, which allows their data to remain secure, said Brendan Foody, CEO of Mercor, a startup that in addition to competing directly with Scale AI also builds technology around being able to recruit and vet candidates in an automated way, enabling AI labs to scale up their data labeling operations quickly. Founded in 2016, Scale AI provides vast amounts of labeled data or curated training data, which is crucial for developing sophisticated tools such as OpenAI's ChatGPT. The Meta deal will be a boon for Scale AI's investors including Accel and Index Ventures, as well as its current and former employees. As part of the deal, Scale AI's CEO, Wang, will take a top position leading Meta's AI efforts. Meta is fighting the perception that it may have fallen behind in the AI race after its initial set of Llama 4 large language models released in April fell short of performance expectations.

Meta Mulls $10B Investment In Scale AI Amid AI Expansion - Meta Platforms (NASDAQ:META)

Meta Platforms Inc META is considering a multibillion-dollar investment into Scale AI, which helps companies train machine-learning models. The investment could top $10 billion in value, Bloomberg reported on Monday, citing unnamed sources familiar with the matter. The startup was last valued at about $14 billion in 2024 in a funding round backed by Meta and Microsoft Corp MSFT. Also Read: Meta Hits 1 Billion Monthly AI Users, Eyes Future With Subscriptions Reportedly, Scale AI discussed a tender offer seeking a valuation of up to $25 billion. Meta chief Mark Zuckerberg prioritized AI Meta, committing up to $65 billion for fiscal 2025. Meta reportedly reorganized its AI teams. The new structure will include an AI products team and an AGI Foundations unit. The AI Products team will concentrate on Meta's AI assistant, AI Studio, and AI functionalities across Facebook, Instagram, and WhatsApp. Meanwhile, the AGI Foundations unit will be responsible for a range of technologies, including the company's Llama models and initiatives to advance reasoning, multimedia, and voice capabilities. Although the company is undergoing restructuring, its AI research division, FAIR (Fundamental AI Research), will continue operating independently of the new organizational setup. Scale AI, co-founded in 2016 by CEO Alexandr Wang, generated revenue of $870 million in 2024 and expects sales to more than double to $2 billion in 2025. Meta partnered with Scale AI on a Defense Llama program, a large language model catering to military use. Price Action: META stock was up 0.6% at $701.92 at last check on Monday. Read Next: Qualcomm Bets $2.4 Billion On Alphawave To Power AI Data Centers Photo: Skorzewiak/Shutterstock METAMeta Platforms Inc$703.040.76%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum87.05Growth92.77Quality86.29Value27.57Price TrendShortMediumLongOverviewMSFTMicrosoft Corp$470.660.06%Market News and Data brought to you by Benzinga APIs

Meta Investing $14.8B In Scale AI, Looks To Build 'Superintelligence': Reports

The parent company of Facebook is investing nearly $15 billion to get a 49 percent stake in AI data preparation company Scale AI, and it's also building what it calls "superintelligence," which is an AI system that supposedly exceeds the power of the human brain, according to multiple reports. Meta, the parent company of Facebook, appears to be making a big AI play with a massive investment in Scale AI. The Information Tuesday reported that Meta has agreed to take a 49 percent stake worth $14.8 billion in Scale AI. Along with the acquisition, Meta will also get Scale AI's CEO, Alexandr Wang. News of a possible acquisition of Scale AI comes on the heels of other reports from the New York Times, CNBC, and others, that Meta is forming a new AI research lab focused on what it calls "superintelligence," and that Wang is supposedly joining that lab as its leader. [Related: AWS, Meta, Microsoft, Nvidia And Oracle: Five Data Center Deals Worth $676B Announced This Month] "Superintelligence" is a hypothetical AI system that "exceeds the powers of the human brain," according to the Times. The lab and the investment are part of a move by Meta to reorganize its AI efforts as the company has invested billions of dollars into remaking itself as an AI powerhouse, the Times wrote. Neither Meta nor Scale AI responded to CRN requests for further information. Scale AI is the developer of the Scale Data Engine, a technology for collecting, curating, and annotating data to train and evaluate AI models. It is in use by multiple international machine learning teams to help accelerate their AI model development. Customers include OpenAI, robotics company Nuro, and Harvard University. The company also provides the ability to customize, evaluate, and deploy specialized AI agents for mission-critical workflows for customers including the U.S. Army and U.S. Air Force, as well as to optimize LLM performance for domain-specific use cases using its RAG (retrieval augmented generation) pipelines.

Meta Invests In Scale AI At $29 Billion Valuation, Taps CEO Alexandr Wang To Drive Internal AI Push As Part Of Deepening Partnership - Alphabet (NASDAQ:GOOG), Alphabet (NASDAQ:GOOGL)

Meta Platforms, Inc. META has made a strategic minority investment in Scale AI, valuing the company at over $29 billion, as part of a broader partnership to accelerate AI development. What Happened: On Thursday, Scale AI confirmed the development. The deal includes a major leadership change: Scale's founder and CEO Alexandr Wang will join Meta to support its internal AI initiatives, while continuing to serve on Scale's board. "Meta's investment recognizes Scale's accomplishments to date and reaffirms that our path forward - like that of AI - is limitless," Wang said in a statement. Also Read: Meta Hits 1 Billion Monthly AI Users, Eyes Future With Subscriptions The board has appointed Jason Droege, Scale's Chief Strategy Officer and a former Uber Eats executive, as interim CEO. "We have built the strongest foundation to tackle AI's data challenges," Droege said. "I'm dedicated to working with our talented team to continue realizing Alex's vision." Why It's Important: Established in 2016, Scale AI has gained significant prominence in the tech industry by assisting major players such as OpenAI, Alphabet Inc.'s GOOG GOOGL Google and Microsoft Corporation MSFT in curating data essential for training advanced AI models. Earlier this week, it was reported that Meta has finalized a $14 billion investment in Scale AI, securing a 49% stake in the artificial intelligence startup. Today's Best Finance Deals Price Action: Meta shares dipped 0.11% on Thursday and fell an additional 0.21% in after-hours trading, according to Benzinga Pro. Benzinga's Edge Stock Rankings show META maintaining an upward trajectory over the short, medium and long term. Additional performance insights are available here. Read Next: Cathie Wood Dumps Palantir As Stock Touches Peak Prices, Bails On Soaring Flying-Taxi Maker Archer Aviation Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo Via Shutterstock GOOGAlphabet Inc$176.40-1.34%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum45.78Growth88.43Quality85.77Value51.30Price TrendShortMediumLongOverviewGOOGLAlphabet Inc$175.00-1.33%METAMeta Platforms Inc$691.89-0.32%MSFTMicrosoft Corp$475.200.55%Market News and Data brought to you by Benzinga APIs

Meta In Talks To Invest Over $10B In Scale AI -- Possibly The Biggest Private AI Deal This Year - Microsoft (NASDAQ:MSFT), Meta Platforms (NASDAQ:META)

Meta META is reportedly preparing to invest more than $10 billion in Scale AI, a startup providing high-quality labeled data to companies building next-generation AI models, including OpenAI and Microsoft MSFT. If finalized, the deal would rank among the largest private funding rounds in tech history, Bloomberg reports. San Francisco-based, Scale AI plays a pivotal role in the artificial intelligence supply chain by powering data pipelines used to train large language models like ChatGPT and Meta's Llama. According to Investor's Business Daily, Meta's potential investment builds on its prior participation in Scale's $1 billion Series F round in 2024, which valued the firm at $18 billion. Don't Miss: Maker of the $60,000 foldable home has 3 factory buildings, 600+ houses built, and big plans to solve housing -- this is your last chance to become an investor for $0.80 per share. Deloitte's fastest-growing software company partners with Amazon, Walmart & Target - Many are rushing to grab 4,000 of its pre-IPO shares for just $0.30/share! Pre-IPO Offer: Get A Piece Of A Nearly $5T Global Opportunity By Joining BOXABL As An Early Shareholder At Just $0.80/Share Massive Demand & Disruptive Potential - Boxabl has received interest for over 190,000 homes, positioning itself as a major disruptor in the housing market. Revolutionary Manufacturing Approach - Inspired by Henry Ford's assembly line, Boxabl's foldable tiny homes are designed for high-efficiency production, making homeownership more accessible. Affordable Investment Opportunity - With homes priced at $60,000, Boxabl is raising $1 billion to scale production, offering investors a chance to own a stake in its growth. Share Price: $0.80 Min. Investment: $1,000 Valuation: $3.5B Click Here To Invest For Just $0.80/Share ($1000 Min)A Strategic Play To Secure AI's Most Valuable Resource While chips and talent dominate most AI headlines, data remains the less-publicized pillar essential to building models that mimic human reasoning, Bloomberg says. Scale AI provides structured and labeled data by deploying a global network of contractors, including experts with PhDs and graduate degrees in medicine, law, and molecular biology. The firm's high-level contributors create test scenarios and reinforce learning strategies for AI systems, ensuring that models produce accurate and context-aware responses, especially in industries such as healthcare and tax law. According to Bloomberg, as of this year, 12% of Scale's contributors involved in improving AI models held PhDs in fields such as molecular biology, while more than 40% had a master's degree, law degree, or MBA in their area of expertise. Trending: Maximize saving for your retirement and cut down on taxes: Schedule your free call with a financial advisor to start your financial journey - no cost, no obligation Scale AI expects to generate $2 billion in revenue this year, more than doubling the $870 million earned last year, Bloomberg reports. This surge reflects the broader industry's increasing need for tailored datasets as synthetic training data begins to reach its performance limits. Meta Aligns Infrastructure With Policy Power Meta's relationship with Scale also serves the purpose of regulatory alignment. Scale CEO Alexandr Wang has become a regular presence in Washington, advising lawmakers on AI regulation and calling for a 'national AI data reserve.' Bloomberg reports that lawmakers on Capitol Hill have welcomed his insights, viewing Scale as a bridge between Silicon Valley innovation and federal oversight. Investor's Business Daily says that Scale has also expanded its role in defense AI by contributing to projects such as Meta's Defense Llama model, designed for U.S. national security applications. This aligns Meta more closely with the U.S. government, following similar partnerships between Microsoft and OpenAI. See Also: Invest where it hurts -- and help millions heal: Invest in Cytonics and help disrupt a $390B Big Pharma stronghold. Risks, Scrutiny, And The Road Ahead Despite its success, Scale has faced criticism for labor practices involving overseas contractors in countries like Kenya and the Philippines, where some workers were paid relatively little and reported psychological distress from reviewing harmful online content, Bloomberg reports. According to TechCrunch, the U.S. Department of Labor has since closed its investigation into the company's compliance with wage regulations, but ongoing scrutiny remains a reputational concern. According to Bloomberg, insiders say discussions between Meta and Scale are ongoing and could still shift. Regardless of a final number, Meta's expected commitment may redefine the race for control of the AI data layer, strengthening Scale AI's position at the heart of artificial intelligence's next chapter. Read Next: Are you rich? Here's what Americans think you need to be considered wealthy. Peter Thiel turned $1,700 into $5 billion -- now accredited investors are eyeing this software company with similar breakout potential. Learn how you can invest with $1,000 at just $0.30/share. Image: Shutterstock METAMeta Platforms Inc$682.55-1.56%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum85.09Growth92.72Quality89.49Value27.51Price TrendShortMediumLongOverviewMSFTMicrosoft Corp$474.18-0.98%Market News and Data brought to you by Benzinga APIs

Meta On The Verge Of A $15 Billion Deal With Scale AI: Report - Meta Platforms (NASDAQ:META)

Meta Platforms Inc META is considering a $15 billion investment in data-labelling startup Scale AI and hiring the group's co-founder, Alexandr Wang, and top researchers. The deal, likely by Wednesday, would give Meta a 49% ownership in Scale AI and value the startup at $28 billion, the Financial Times reported on Wednesday, citing unnamed sources familiar with the matter. Prior reports indicated Meta may invest over $10 billion in Scale AI. Also Read: Meta Hits 1 Billion Monthly AI Users, Eyes Future With Subscriptions The move marks Meta's plan to build a "superintelligence" lab to compete with OpenAI, Anthropic, and Google. Meta's latest large language model, Llama 4, failed to impress with its independent reasoning and coding benchmarks. Meanwhile, competitors such as Alphabet Inc GOOG GOOGL Google, OpenAI, and Anthropic have showcased advanced "reasoning" models. Meta also faced competition from affordable open-source competitors like China's DeepSeek. In 2024, Meta rivals Microsoft paid $650 million to poach Inflection boss Mustafa Suleyman and their team and to license the startup's technology. Google also spent $2.7 billion on a similar arrangement with Character AI. Reportedly, Meta is considering a system that would enable brands to design and target ads using AI by the end of 2026. Meta's current ad platform already uses AI to generate ad variations before targeting users on Facebook and Instagram. Meta's advertising business is already thriving, with ad impressions increasing by 5% and the average price per ad rising by 10% year-over-year, as reported in its first-quarter results. Price Action: META stock was trading lower by 0.34% to $700.02 premarket at last check Wednesday. Read Next: Meta Offers AI Startups Free Tools, Funding To Boost Llama Model Adoption Photo by Skorzewiak via Shutterstock METAMeta Platforms Inc$700.38-0.29%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum86.41Growth92.74Quality86.62Value27.02Price TrendShortMediumLongOverviewGOOGAlphabet Inc$179.68-0.18%GOOGLAlphabet Inc$178.30-0.17%Market News and Data brought to you by Benzinga APIs

Meta Reportedly Exploring $10 Billion-Plus Investment in Scale AI | PYMNTS.com

By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions. The tech giant is in talks with Scale AI about an investment that could exceed $10 billion, Bloomberg News reported Sunday (June 8), citing sources familiar with the matter. Scale AI, which counts Microsoft and OpenAI among its clients, offers data labeling services to help businesses train machine learning models. As Bloomberg noted, the startup has been a crucial beneficiary of the generative AI boom, valued at $13.8 billion following a funding round in the spring of 2024. Meta was among the investors in that round, which raised $1 billion. PYMNTS has contacted both Meta and Scale AI for comment but has not yet gotten a reply. According to Bloomberg, the investment would mark Meta's largest-ever outside expenditure on AI, a rare move for a company that has largely depended on internal research. At the same time, rival tech giants have been spending heavily on AI, from Microsoft's $13-plus billion investment in OpenAI to Google's and Amazon's push to back competing startup Anthropic. The report also noted that Meta CEO Mark Zuckerberg has made AI the company's chief priority, announcing plans in January to spend up to $65 billion on related projects this year. Meta also aims to make its Llama AI model the global industry standard, the report added, as its chatbot is used by 1 billion people per month on its social media platforms Facebook, Instagram and WhatsApp. The news follows reports from last month that Meta was reorganizing its generative artificial intelligence team to accelerate rollouts of products and features. The move, which involves dividing the team into two groups, is designed to streamline operations and clarify roles, thus enhancing the company's competitive edge in the rapidly changing AI industry, Meta said in an internal memo cited in media reports. In other AI news, PYMNTS wrote recently about the way small and medium-sized businesses (SMBs) are embracing artificial intelligence to compete against large enterprises. "By automating processes, augmenting talent, and accelerating decision-making, AI enables smaller firms to bypass legacy systems and leap directly into an AI-first business model -- one that can rival what large incumbents offer," that report said. That report followed the release of new data from Verizon Business' 2025 State of Small Business Survey, showing that 38% of SMBs are integrating AI into operations. In addition, 28% of SMBs said they were deploying AI for marketing and social media, while 24% use it for written communications.

Meta in talks over Scale AI stake that could top $10B, Bloomberg...

Meta Platforms is in talks to make an investment that could exceed $10 billion in artificial intelligence startup Scale AI, Bloomberg News reported on Sunday. The terms of the deal were not yet finalized and could still change, the report said, citing people familiar with the matter. Scale AI declined to comment and Meta did not immediately respond to Reuters request for comment outside regular business hours. Founded in 2016, Scale AI is a data labeling startup backed by tech giants Nvidia, Amazon, and Meta. Last valued at nearly $14 billion, Scale AI also provides a platform for researchers to exchange AI-related information, with contributors in more than 9,000 cities and towns.

Meta paying $15B for stake in AI startup, gets 'superintelligence'...

Meta Platforms has agreed to take a 49% stake in artificial intelligence startup Scale AI for $14.8 billion, The Information reported on Tuesday, citing two people familiar with the matter. Founded in 2016, Scale AI provides vast amounts of labeled data or curated training data, which is crucial for developing sophisticated tools such as OpenAI's ChatGPT. The deal, which has not been finalized yet, appears to be beneficial for Scale AI's investors, including Accel, Index Ventures, Founders Fund and Greenoaks Capital, as well as its current and former employees, the report said. Meta, Scale AI and the startup's investors did not immediately respond to Reuters' requests for comment. As part of the deal, Scale AI CEO Alexandr Wang will take a top position inside Meta, leading a new "superintelligence" lab, according to the report. Meta CEO Mark Zuckerberg has been actively recruiting top AI researchers to boost the company's AI efforts, the report said. The company is fighting the perception that it may have fallen behind in the AI race after its initial set of Llama 4 large language models released in April fell short of performance expectations. Meta delayed the release of its flagship "Behemoth" AI model due to concerns about its capabilities, the Wall Street Journal reported last month. The company is also facing antitrust concerns related to its acquisitions of Instagram and WhatsApp. According to The Information report, the structure for the potential deal with Scale AI could be designed to avoid more regulatory scrutiny. Scale AI was valued at $13.8 billion in a funding round last spring. It generated about $870 million in revenue in 2024 and expects more than $2 billion this year, the report said. The company counts AI firms OpenAI and Cohere as well as tech giants Microsoft, Meta and Cisco Systems among its customers, according to its website.

Meta Stock Reacts to Bold $15B AI Investment

Scale AI's data expertise enhances Meta's model training and accuracy. Meta recently made one of its biggest moves in artificial intelligence (AI) by investing $15 billion into Scale AI. This bold decision places Meta firmly in the global race for artificial general intelligence (AGI). With this deal, Meta signals a strong intent to compete against companies like Microsoft, Google, and Amazon in the rapidly growing AI sector. The move carries significant implications for Meta's stock performance, business strategy, and future growth.

Meta invests US$14.3B in AI firm Scale and recruits its CEO for 'superintelligence' team

Meta is making a $14.3 billion investment in artificial intelligence company Scale and recruiting its CEO Alexandr Wang to join a team developing "superintelligence" at the tech giant. The deal announced Thursday reflects a push by Meta CEO Mark Zuckerberg to revive AI efforts at the parent company of Facebook and Instagram as it faces tough competition from rivals such as Google and OpenAI. Meta announced what it called a "strategic partnership and investment" with Scale late Thursday. Scale said the $14.3 billion investment puts its market value at over $29 billion. Scale said it will remain an independent company but the agreement will "substantially expand Scale and Meta's commercial relationship." Meta will hold a 49 per cent stake in the startup. Wang, though leaving for Meta with a small group of other Scale employees, will remain on Scale's board of directors. Replacing him is a new interim Scale CEO Jason Droege, who was previously the company's chief strategy officer and had past executive roles at Uber Eats and Axon. Zuckerberg's increasing focus on the abstract idea of "superintelligence," which rival companies call artificial general intelligence, or AGI, is the latest pivot for a tech leader who in 2021 went all-in on the idea of the metaverse, changing the company's name and investing billions into advancing virtual reality and related technology. It won't be the first time since ChatGPT's 2022 debut sparked an AI arms race that a big tech company has gobbled up talent and products at innovative AI startups without formally acquiring them. Microsoft hired key staff from startup Inflection AI, including co-founder and CEO Mustafa Suleyman, who now runs Microsoft's AI division. Google pulled in the leaders of AI chatbot company Character.AI, while Amazon made a deal with San Francisco-based Adept that sent its CEO and key employees to the e-commerce giant. Amazon also got a license to Adept's AI systems and datasets. Wang was a 19-year-old student at the Massachusetts Institute of Technology when he and co-founder Lucy Guo started Scale in 2016. They won influential backing that summer from the startup incubator Y Combinator, which was led at the time by Sam Altman, now the CEO of OpenAI. Wang dropped out of MIT, following a trajectory similar to that of Zuckerberg, who quit Harvard University to start Facebook more than a decade earlier. Scale's pitch was to supply the human labor needed to improve AI systems, hiring workers to draw boxes around a pedestrian or a dog in a street photo so that self-driving cars could better predict what's in front of them. General Motors and Toyota have been among Scale's customers. What Scale offered to AI developers was a more tailored version of Amazon's Mechanical Turk, which had long been a go-to service for matching freelance workers with temporary online jobs. More recently, the growing commercialization of AI large language models -- the technology behind OpenAI's ChatGPT, Google's Gemini and Meta's Llama -- brought a new market for Scale's annotation teams. The company claims to service "every leading large language model," including from Anthropic, OpenAI, Meta and Microsoft, by helping to fine tune their training data and test their performance. It's not clear what the Meta deal will mean for Scale's other customers. Wang has also sought to build close relationships with the U.S. government, winning military contracts to supply AI tools to the Pentagon and attending President Donald Trump's inauguration. The head of Trump's science and technology office, Michael Kratsios, was an executive at Scale for the four years between Trump's first and second terms. Meta has also begun providing AI services to the federal government. Meta has taken a different approach to AI than many of its rivals, releasing its flagship Llama system for free as an open-source product that enables people to use and modify some of its key components. Meta says more than a billion people use its AI products each month, but it's also widely seen as lagging behind competitors such as OpenAI and Google in encouraging consumer use of large language models, also known as LLMs. It hasn't yet released its purportedly most advanced model, Llama 4 Behemoth, despite previewing it in April as "one of the smartest LLMs in the world and our most powerful yet." Meta's chief AI scientist Yann LeCun, who in 2019 was a winner of computer science's top prize for his pioneering AI work, has expressed skepticism about the tech industry's current focus on large language models. "How do we build AI systems that understand the physical world, that have persistent memory, that can reason and can plan?" LeCun asked at a French tech conference last year. These are all characteristics of intelligent behavior that large language models "basically cannot do, or they can only do them in a very superficial, approximate way," LeCun said. Instead, he emphasized Meta's interest in "tracing a path towards human-level AI systems, or perhaps even superhuman." When he returned to France's annual VivaTech conference again on Wednesday, LeCun dodged a question about the pending Scale deal but said his AI research team's plan has "always been to reach human intelligence and go beyond it." "It's just that now we have a clearer vision for how to accomplish this," he said. LeCun co-founded Meta's AI research division more than a decade ago with Rob Fergus, a fellow professor at New York University. Fergus later left for Google but returned to Meta last month after a 5-year absence to run the research lab, replacing longtime director Joelle Pineau. Fergus wrote on LinkedIn last month that Meta's commitment to long-term AI research "remains unwavering" and described the work as "building human-level experiences that transform the way we interact with technology."

Meta Accelerates AI Push with $14.8B Investment in Scale AI and New Research Division

Meta Platforms is making a decisive move in artificial intelligence by establishing a new AI research lab focused on "superintelligence." The company will bring in Alexandr Wang, founder and CEO of Scale AI, to lead the effort. This development follows Meta's reported $14.8 billion agreement to acquire a 49% stake in Scale AI, marking one of the sector's largest deals to date. Meta's decision to form an advanced research division signals a shift in its strategy as competition intensifies among technology giants. Alexandr Wang will oversee the new superintelligence lab at Meta, following the investment deal that positions Meta as a nearly equal partner with Scale AI. This transition aligns with Meta's commitment to advancing generative AI and machine learning. As a leading investor in artificial intelligence, the company plans to invest up to $65 billion in AI infrastructure this year. Founded in 2016, Scale AI focuses on curating and labelling extensive datasets essential for developing and training advanced Its clients include Meta and government agencies like the U.S. Department of Defence. Last year, the startup reported $870 million in revenue and forecasts over $2 billion in 2025, as noted by Bloomberg. The $14.8 billion transaction will further deepen Meta's access to high-quality data and technical leadership as it strives to compete with AI leaders like Google and Microsoft.

Meta takes 49% stake in Scale AI for $14.8 billion - The Information By Investing.com

Investing.com -- Meta (NASDAQ:META) has agreed to acquire a 49% stake in data labeling firm Scale AI for $14.8 billion, according to a report from the Information, citing two people familiar with the matter. The deal will be structured in an unusual way, with Meta sending cash directly to Scale's existing shareholders while placing Scale's CEO, Alexandr Wang, in a senior position within Meta. Earlier reports from the weekend had indicated the investment would exceed $10 billion. The transaction, which has not yet been finalized, represents a significant gain for Scale's shareholders, including major investors such as Accel, Index Ventures, Founders Fund, and Greenoaks Capital, as well as current and former employees. These shareholders will maintain their existing holdings in Scale, which will now be valued at $28 billion, including the cash invested. This marks an increase from the company's $13.8 billion valuation last year. As part of the arrangement, Meta plans to put Wang in charge of a new "superintelligence" lab, along with other top Scale technical employees, as reported by the New York Times (NYSE:NYT) and Bloomberg on Tuesday. This move will position Wang, who is 28 years old, in competition with some of his customers and friends, including OpenAI CEO Sam Altman. The deal is expected to further increase the wealth of Wang, who became the youngest self-made billionaire in the U.S. several years ago.

Meta in talks over Scale AI investment that could exceed $10 billion, Bloomberg reports

(Reuters) -Meta Platforms is in talks to make an investment that could exceed $10 billion in artificial intelligence startup Scale AI, Bloomberg News reported on Sunday. The terms of the deal were not yet finalized and could still change, the report said, citing people familiar with the matter. Scale AI declined to comment and Meta did not immediately respond to Reuters request for comment outside regular business hours. Founded in 2016, Scale AI is a data labeling startup backed by tech giants Nvidia, Amazon and Meta. Last valued at nearly $14 billion, Scale AI also provides a platform for researchers to exchange AI-related information, with contributors in more than 9,000 cities and towns. (Reporting by Gursimran Kaur in BengaluruEditing by Bernadette Baum)

Meta in talks to potentially invest over $10B in Scale AI, founded by world's youngest self-made billionaire Alexandr Wang

Meta Platforms is in talks to make an investment that could exceed US$10 billion in Scale AI, an artificial intelligence startup founded by world's youngest self-made billionaire Alexandr Wang. The terms of the deal were not yet finalized and could still change, the report said, citing people familiar with the matter, Bloomberg News reported on Sunday. Scale AI declined to comment and Meta did not immediately respond to Reuters request for comment outside regular business hours. Founded in 2016, Scale AI is a data labeling startup backed by tech giants Nvidia, Amazon and Meta. Last valued at nearly $14 billion, Scale AI also provides a platform for researchers to exchange AI-related information, with contributors in more than 9,000 cities and towns.

Meta to pay nearly $15 billion for Scale AI stake, The Information reports

(Reuters) -Meta Platforms has agreed to take a 49% stake in artificial intelligence startup Scale AI for $14.8 billion, The Information reported on Tuesday, citing two people familiar with the matter. Founded in 2016, Scale AI provides vast amounts of labeled data or curated training data, which is crucial for developing sophisticated tools such as OpenAI's ChatGPT. The deal, which has not been finalized yet, appears to be beneficial for Scale AI's investors, including Accel, Index Ventures, Founders Fund and Greenoaks Capital, as well as its current and former employees, the report said. Meta, Scale AI and the startup's investors did not immediately respond to Reuters' requests for comment. As part of the deal, Scale AI CEO Alexandr Wang will take a top position inside Meta, leading a new "superintelligence" lab, according to the report. Meta CEO Mark Zuckerberg has been actively recruiting top AI researchers to boost the company's AI efforts, the report said. The company is fighting the perception that it may have fallen behind in the AI race after its initial set of Llama 4 large language models released in April fell short of performance expectations. Meta delayed the release of its flagship "Behemoth" AI model due to concerns about its capabilities, the Wall Street Journal reported last month. The company is also facing antitrust concerns related to its acquisitions of Instagram and WhatsApp. According to The Information report, the structure for the potential deal with Scale AI could be designed to avoid more regulatory scrutiny. Scale AI was valued at $13.8 billion in a funding round last spring. It generated about $870 million in revenue in 2024 and expects more than $2 billion this year, the report said. The company counts AI firms OpenAI and Cohere as well as tech giants Microsoft, Meta and Cisco Systems among its customers, according to its website. (Reporting by Jaspreet Singh in Bengaluru; Editing by Shilpi Majumdar)

Meta ready to invest heavily in Scale AI

Meta is going all-out on artificial intelligence. According to The Information, the group is forming a team of the best AI engineers on the market. To attract these talents, Meta is not shy about opening its wallet. In particular, the group has taken a significant stake in Scale AI, a company specializing in data annotation, to accelerate its ambitions in this field. Meta Platforms has reached an agreement in principle to acquire a 49% stake in Scale AI, a startup specializing in training data for artificial intelligence, for $14.8bn, The Information reported, citing two sources familiar with the matter. Founded in 2016, Scale AI provides large amounts of annotated data, which is essential for the development of advanced AI tools such as OpenAI's ChatGPT. The deal, although still being finalized, would represent a very favorable transaction for Scale AI's investors, which include Accel, Index Ventures, Founders Fund, and Greenoaks, as well as for its current and former employees. According to The Information, the deal also includes the appointment of Scale AI CEO Alexandr Wang to head a new "superintelligence" AI team at Meta. This structure would be responsible for reviving Meta's ambition in the race for advanced AI, an area where the company is seeking to catch up with its perceived competitors. For several months, Mark Zuckerberg has been actively recruiting the best AI talent to strengthen Meta's internal capabilities. The disappointing performance of Llama 4, the latest generation of language models unveiled in April, has increased pressure on the company. According to The Wall Street Journal, the launch of the flagship model, dubbed "Behemoth," has been delayed due to concerns about its performance. The deal with Scale AI could be structured to avoid too much scrutiny from antitrust authorities at a time when Meta is already facing increased scrutiny over its previous acquisitions of Instagram and WhatsApp. Valued at $13.8bn in spring 2024, Scale AI generated approximately $870 million in revenue last year and expects to generate more than $2bn in 2025. The company had more than $900m in cash at end-2024, the same report says.

Meta in Talks to Invest $14 Billion in Scale AI

Meta Platforms, Inc. (NasdaqGS:META) is in advanced talks to invest approximately $14 billion into Scale AI, Inc. and hire the start-up's CEO, Alexandr Wang, to help lead its AI -efforts, according to people familiar with the matter. The deal would be one of the social media giant's largest outside investments and underline the dramatic steps it is taking to revamp its AI strategy, which has suffered setbacks including the delayed release of a new model. As part of the proposed deal - which is still being finalised - other Scale AI employees would join Meta alongside Mr. Wang as part of a plan to develop advanced AI called superintelligence. Meta CEO Mark Zuckerberg personally got involved in the recruitment for the superintelligence effort after the company struggled to develop its recent Llama models, including by reaching out to AI researchers directly on WhatsApp, according to a person familiar with his approach. On Tuesday, Chris Cox, Meta's chief product officer, sent an internal memo to some employees saying the company was finalising details on its plans for AI leadership. Tech giants have largely struggled to keep up with the pace of AI innovation, forcing them to look at young start-ups for fresh talent. Antitrust scrutiny in recent years has made it difficult for them to acquire companies, so they are instead resorting to large minority investments in start-ups that allow them to hire their key employees. Last year, Microsoft, Amazon and Google all made similar deals for AI start-ups. Unlike those start-ups, however, Scale AI isn't a research lab focused on building its own large language models from scratch. Instead, it is a data-labelling company that manages more than 100,000 contractors from across the world who label images, write sentences and type out stories that help AI chatbots learn how to think and speak like humans. The start-up has sold its services to OpenAI, Google and Meta, and has more recently begun to build software products that help businesses create AI tools, though that is a smaller part of its business. The investment would give Meta 49% of the company. The social media giant and the start-up have discussed an arrangement in which Meta would receive non-voting shares. Should those turn into voting shares, Mr. Wang would have control over them, one of the people said. A portion of the invested cash would be given to Scale shareholders, who would retain their ownership in the start-up, the person said.

Meta finalizes investment in Scale AI, valuing startup at $29 billion

(Reuters) -Meta Platforms has finalized an investment in Scale AI that values the startup at over $29 billion, Scale AI said on Thursday. Scale CEO and co-founder Alexandr Wang will join Meta to work on its AI efforts, with Scale's chief strategy officer, Jason Droege, to serve as its interim CEO, Scale AI added. Two sources familiar with the matter said that Meta's investment in Scale AI is $14.3 billion. The sources said that Wang will join a new "superintelligence" unit inside Meta to achieve artificial general intelligence (AGI), a term that refers to machines that can match or surpass human capabilities. (Reporting by Rishabh Jaiswal and Krystal Hu; Editing by Alan Barona)

Meta finalizes $14.3 billion investment in Scale AI, sources say, poaching CEO Wang

(Reuters) -Facebook-owner Meta has finalized the $14.3 billion purchase of a 49% stake in data-labeling startup Scale AI, according to two sources familiar with the matter. Scale said late on Thursday that the deal values it at $29 billion and its CEO Alexandr Wang will join Meta to play a prominent role in the Facebook owner's AI strategy. Scale's chief strategy officer, Jason Droege, will serve as its interim CEO, Scale AI said. The company did not respond to a request for additional information on the financial details of the transaction. The deal would rank as Meta's second-largest ever after its $19 billion buyout of WhatsApp. The sources declined to be identified because the information was not public. By poaching Wang, who does not come from a research background but was able to build one of the largest businesses in fueling useful data essential for model training for AI labs, Meta CEO Mark Zuckerberg is betting that Meta's AI efforts can be turned around by an adept business leader more in the mold of OpenAI's Sam Altman than the research scientists at the helm of most competing labs. Since many of those labs have contracted Scale for data services, Zuckerberg could also obtain an inside track into his rivals' priorities around data, one of the key ingredients for developing today's AI models. Scale was valued at nearly $14 billion in a May 2024 funding round where the company raised $1 billion from backers including tech giants Nvidia, Amazon and Meta. Founded in 2016, Scale AI provides vast amounts of accurately labeled data, which is pivotal for training sophisticated tools like OpenAI's ChatGPT. To do so, Scale set up subsidiary platforms such as Remotasks and Outlier to recruit and manage gig workers who manually label the data. Wang, the 28-year-old co-founder, has steered the company to provide data labeling services across the buzzy tech sectors of the moment, from autonomous vehicles several years ago to generative AI today. (Reporting by Rishabh Jaiswal, Krystal Hu and Kenrick Cai; Editing by Alan Barona and Jamie Freed)

Scale AI Gets Meta Investment That Values It at More Than $29 Billion

Scale AI has been valued at more than $29 billion after a significant investment from Meta Platforms that will see its founder, Alexandr Wang, join the social-media giant to work on its AI efforts. The artificial-intelligence startup announced the investment on Thursday, confirming an earlier report by The Wall Street Journal. The data-labeling company said proceeds from the investment will be distributed to its shareholders, accelerate innovation efforts and strengthen existing customer relationships. Meta will hold a minority of Scale's outstanding equity. Scale AI didn't disclose the size of the investment, but the AI startup was valued at nearly $14 billion after a fundraising round last year. The deal marks one of Meta's largest-ever outside investments and shows the dramatic steps it is taking to revamp its AI work, which has suffered setbacks including the delayed release of a major new model. The Wall Street Journal on Tuesday said Meta was seeking to invest around $14 billion in Scale AI, which would give it a 49% stake in the company. The agreement will substantially expand Scale AI and Meta's commercial relationship to accelerate the deployment of Scale's data solutions, the startup said. "We will deepen the work we do together producing data for AI models, and Alexandr Wang will join Meta to work on our superintelligence efforts. We will share more about this effort and the great people joining this team in the coming weeks," a Meta spokesman said. Wang will remain a director on Scale AI's board. Chief Strategy Officer Jason Droege, who joined Scale in September, will serve as interim chief executive. The nine-year-old San Francisco-based startup manages more than 100,000 contractors from across the world who label images, write sentences and type out stories that help AI chatbots learn how to think and speak like humans. The startup has sold its services to OpenAI, Google and Meta and has more recently begun building software products that help businesses create AI tools, although this is a smaller part of its business. Before joining Scale AI, Droege was a venture partner at Benchmark, an investment firm focused on early-stage venture investing, and was a founder of Uber Eats, Uber's food-delivery platform.

Meta's Scale AI stake buyout spotlights other major deals amid regulatory risks

(Reuters) -Meta has finalized a $14.3 billion purchase of a 49% stake in data labeling startup Scale AI, according to sources familiar with the matter. Scale AI said late on Thursday that the deal would value it at $29 billion and that the startup's chief executive, Alexandr Wang, would join Meta to head a new team focused on artificial general intelligence, the latest twist in Silicon Valley's race toward the cutting-edge technology. Founded in 2004 by CEO Mark Zuckerberg and his fellow Harvard University students and originally called "TheFacebook", the company dropped "The" from its name after securing the Facebook.com domain in 2005. It rebranded as Meta Platforms in 2021. The Scale AI deal comes when Meta, which has a market value of $1.77 trillion, contends with antitrust scrutiny surrounding its acquisitions of WhatsApp and Instagram. WhatsApp $19 February October Mobile messaging platform Oculus VR $2 billion March Same year Maker of virtual-reality glasses Instagram $1 billion April Same year Mobile photo- and video-sharing Kustomer $1 billion November February Customer relationship management CTRL-Labs Between September Same year New York-based startup LiveRail $400 July 2014 Same year San Francisco-based video and Giphy $400 May 2020 Unable to Meta faced regulatory scrutiny (Reporting by Jaspreet Singh in Bengaluru; additional reporting by Kanjyik Ghosh Editing by Pooja Desai and Rashmi Aich)

Meta scores a double win with Scale AI, securing both capital and leadership

(MarketScreener with Reuters) Meta on Thursday formalized a strategic investment in the start-up Scale AI, worth $29bn, and in the process secured the services of its young founder and CEO, Alexandr Wang, 28. The deal, which gives Meta a 49% stake, represents a commitment of $14.3bn and marks one of the largest investments in the group's history, just behind the acquisition of WhatsApp in 2014. Alexandr Wang will take the reins of Meta's "superintelligence" efforts, a key area in the current battle around advanced artificial intelligence. "We will strengthen our collaboration on data production for AI models, and Alexandr Wang will join Meta to lead our work in superintelligence," Meta said in a statement without mentioning financial details. According to sources close to the matter, Wang's arrival was the main driver behind this massive investment. The founder of Scale, who does not come from academia but has built a successful AI company, is seen by Mark Zuckerberg as someone with a profile similar to that of Sam Altman (OpenAI), a visionary and pragmatic leader, rather than a researcher. Born in Los Alamos, New Mexico, to Chinese physicist parents, Wang left MIT to co-found Scale in 2016. He quickly established himself as one of Silicon Valley's most promising entrepreneurs, raising funds from the biggest names in venture capital and becoming a billionaire before the age of 30. He has forged close ties with leading figures in the industry, including Sam Altman, and with institutions in Washington, even testifying before the US Congress. Wang's arrival comes at a time when Meta is struggling to maintain its position in the race for generative AI. The group has seen several talented employees leave and has postponed the launch of open source models intended to rival those of Google (Alphabet), OpenAI, and DeepSeek. Meta hopes that more operational leadership, embodied by Wang, will give new impetus to its ambitions. Contrary to usual practice, Meta does not plan to have a seat on Scale's board of directors, and Wang will remain a member of his company's board. He will be joined at Meta by a few of Scale's 1,500 employees. Jason Droege, current chief strategy officer, will serve as interim head of Scale. Founded in 2016, Scale AI specializes in providing massively annotated data, which is essential for training AI models. It relies in particular on its Remotasks and Outlier platforms, which mobilize thousands of freelancers around the world. Although the deal is a financial success for long-standing investors such as Accel and Index Ventures, who will be able to sell up to half of their shares, it could weaken Scale's commercial relationships. Some of the company's AI laboratory clients could turn away from its services for fear that Meta will have access, even indirectly, to sensitive information about their data needs or strategies. Meta, currently facing antitrust lawsuits from the FTC over its past acquisitions of Instagram and WhatsApp, has not specified whether this transaction will be subject to regulatory review. However, by structuring the deal without a formal takeover, the group appears to be seeking to avoid excessive legal scrutiny. This move further intensifies competition in the field of artificial intelligence, where Meta, which has been struggling in recent months, is seeking to regain the initiative through both industrial and human resources.

Meta finalizes $14.3 billion Scale AI investment, poaching its CEO -- world's youngest self-made billionaire Alenxandr Wang - VnExpress International

Facebook-owner Meta has finalized the US$14.3 billion purchase of a 49% stake in data-labeling startup Scale AI, according to two sources familiar with the matter. Scale said late on Thursday that the deal values it at $29 billion and its CEO Alexandr Wang will join Meta to play a prominent role in the Facebook owner's AI strategy. Scale's chief strategy officer, Jason Droege, will serve as its interim CEO, Scale AI said. The company did not respond to a request for additional information on the financial details of the transaction. The deal would rank as Meta's second-largest ever after its $19 billion buyout of WhatsApp. The sources declined to be identified because the information was not public. By poaching Wang, who does not come from a research background but was able to build one of the largest businesses in fueling useful data essential for model training for AI labs, Meta CEO Mark Zuckerberg is betting that Meta's AI efforts can be turned around by an adept business leader more in the mold of OpenAI's Sam Altman than the research scientists at the helm of most competing labs. Since many of those labs have contracted Scale for data services, Zuckerberg could also obtain an inside track into his rivals' priorities around data, one of the key ingredients for developing today's AI models. Scale was valued at nearly $14 billion in a May 2024 funding round where the company raised $1 billion from backers including tech giants Nvidia, Amazon and Meta. Founded in 2016, Scale AI provides vast amounts of accurately labeled data, which is pivotal for training sophisticated tools like OpenAI's ChatGPT. To do so, Scale set up subsidiary platforms such as Remotasks and Outlier to recruit and manage gig workers who manually label the data. Wang, the 28-year-old co-founder, has steered the company to provide data labeling services across the buzzy tech sectors of the moment, from autonomous vehicles several years ago to generative AI today.

Meta poaches 28-year-old Scale AI CEO after taking multibillion dollar stake in startup

(Reuters) -Facebook-owner Meta has invested in Scale AI in a deal that values the data-labeling startup at $29 billion and brings in its 28-year-old CEO, Alexandr Wang, to play a prominent role in the tech giant's artificial intelligence strategy. Meta will take a 49% stake for $14.3 billion, according to two sources familiar with the matter. "We will deepen the work we do together producing data for AI models and Alexandr Wang will join Meta to work on our superintelligence efforts," Meta said in a statement that did not disclose financial terms. The main driver for Meta's substantial investment in Scale was to secure Wang to lead its new superintelligence unit, according to a separate source briefed on the discussions. The sources were not authorised to speak to media and declined to be identified. Meta didn't immediately respond to a request for comment. Wang, who was born in Los Alamos, New Mexico, to Chinese immigrant physicists, dropped out of MIT to co-found Scale. He was quickly lauded as one of Silicon Valley's most promising entrepreneurs, raising funding from blue-chip venture capital firms and achieving billionaire status in his 20s. He has also cultivated relationships with top tech executives such as OpenAI CEO Sam Altman and has since leveraged his influence to build connections in Washington D.C., testifying in front of Congress and securing the federal government as a big client. Meta, once recognized as a leader in open-source AI models, has suffered from staff departures and has postponed the launches of new open-source AI models that could rival competitors like Google, OpenAI, and China's DeepSeek. By poaching Wang, who does not come from a research background but has built a major AI business, Meta CEO Mark Zuckerberg is betting that Meta's AI efforts can be turned around by an adept business leader more in the mold of Altman than the research scientists at the helm of most competing labs. Scale said the deal values it at $29 billion and that its chief strategy officer, Jason Droege, will serve as its interim CEO. The social media giant doesn't plan to take a board seat in Scale, one of the sources added. A few employees from Scale, a company with 1,500 people, will join Wang in moving to Meta, Wang said in a note to employees on Thursday. Wang will remain on Scale's board. The cash investment would rank as Meta's second-largest ever after its $19 billion buyout of WhatsApp. It's unclear if this deal will come under any regulatory scrutiny. Meta has been sued by the U.S. Federal Trade Commission, which alleges it illegally acquired Instagram and WhatsApp to stifle competition. Founded in 2016, Scale provides vast amounts of accurately labeled data, which is pivotal for training sophisticated tools like OpenAI's ChatGPT. To do so, Scale set up subsidiary platforms such as Remotasks and Outlier to recruit and manage gig workers who manually label the data. It was valued at nearly $14 billion in a May 2024 funding round that included Nvidia, Amazon and Meta among its backers. Despite the large investment sum, the deal might not be all good for Scale. Many AI labs that are clients of Scale could decide to discontinue using its services if they were to worry, that since Wang still sits on Scale's board, Meta might obtain an inside track into rivals' priorities around data. Still, the deal is a win for early venture capital investors in Scale, such as Accel and Index Ventures, who can cash out half of their stake in the startup. (Reporting by Krystal Hu, Rishabh Jaiswal and Kenrick Cai; Editing by Alan Barona, Jamie Freed and Edwina Gibbs)

OpenAI to continue working with Scale AI after Meta deal

PARIS (Reuters) -OpenAI plans to continue working with Scale AI after rival Meta on Friday agreed to take a 49% stake in the artificial intelligence startup for $14.8 billion, OpenAI's CFO Sarah Friar told the VivaTech conference in Paris. Scale AI provides vast amounts of labelled or curated training data, which is crucial for developing sophisticated tools such as OpenAI's ChatGPT. "We don't want to ice the ecosystem because acquisitions are going to happen," she said. "And if we ice each other out, I think we're actually going to slow the pace of innovation." Microsoft -backed OpenAI's ChatGPT AI language models rival those of Meta's Llama family of models. Scale CEO Alexandr Wang will now join Meta to lead its new superintelligence unit. "We don't just buy from Scale, Friar said. "We work with many vendors on the data front." "As models have gotten smarter, you're going into a place where you need real expertise ... we have academics and experts telling us that they are finding novel things in their space." Sophisticated updates to AI models in the fiercely competitive arena are now demanding a rapidly expanding network of human trainers who have specialized knowledge - from historians to scientists, some with doctorate degrees. (Reporting by Supantha Mukherjee in Paris, Editing by Louise Heavens)

Meta finalizes $14.3B Scale AI investment, poaching its CEO - world's youngest self-made billionaire Alenxandr Wang - VnExpress International

Facebook-owner Meta has finalized the US$14.3 billion purchase of a 49% stake in data-labeling startup Scale AI, according to two sources familiar with the matter. Scale said late on Thursday that the deal values it at $29 billion and its CEO Alexandr Wang will join Meta to play a prominent role in the Facebook owner's AI strategy. Scale's chief strategy officer, Jason Droege, will serve as its interim CEO, Scale AI said. The company did not respond to a request for additional information on the financial details of the transaction. The deal would rank as Meta's second-largest ever after its $19 billion buyout of WhatsApp. The sources declined to be identified because the information was not public. By poaching Wang, who does not come from a research background but was able to build one of the largest businesses in fueling useful data essential for model training for AI labs, Meta CEO Mark Zuckerberg is betting that Meta's AI efforts can be turned around by an adept business leader more in the mold of OpenAI's Sam Altman than the research scientists at the helm of most competing labs. Since many of those labs have contracted Scale for data services, Zuckerberg could also obtain an inside track into his rivals' priorities around data, one of the key ingredients for developing today's AI models. Scale was valued at nearly $14 billion in a May 2024 funding round where the company raised $1 billion from backers including tech giants Nvidia, Amazon and Meta. Founded in 2016, Scale AI provides vast amounts of accurately labeled data, which is pivotal for training sophisticated tools like OpenAI's ChatGPT. To do so, Scale set up subsidiary platforms such as Remotasks and Outlier to recruit and manage gig workers who manually label the data. Wang, the 28-year-old co-founder, has steered the company to provide data labeling services across the buzzy tech sectors of the moment, from autonomous vehicles several years ago to generative AI today.

Meta's $14.8 billion Scale AI deal latest test of AI partnerships

(Reuters) -Facebook owner Meta's $14.8 billion investment in Scale AI and hiring of the data-labeling startup's CEO will test how the Trump administration views so-called acquihire deals, which some have criticized as an attempt to evade regulatory scrutiny. The deal, announced on Thursday, was Meta's second-largest investment to date. It gives the owner of Facebook a 49% nonvoting stake in Scale AI, which uses gig workers to manually label data and includes among its customers Meta competitors Microsoft and ChatGPT creator OpenAI. Unlike an acquisition or a transaction that would give Meta a controlling stake, the deal does not require a review by U.S. antitrust regulators. However, they could probe the deal if they believe it was structured to avoid those requirements or harm competition. The deal appeared to be structured to avoid potential pitfalls, such as cutting off competitors' access to Scale's services or giving Meta an inside view into rivals' operations - though Reuters exclusively reported on Friday that Alphabet's Google has decided to sever ties with Scale in light of Meta's stake, and other customers are looking at taking a step back. In a statement, a Scale AI spokesperson said its business, which spans work with major companies and governments, remains strong, as it is committed to protecting customer data. The company declined to comment on specifics with Google. Alexandr Wang, Scale's 28-year-old CEO who is coming to Meta as part of the deal, will remain on Scale's board but will have appropriate restrictions placed around his access to information, two sources familiar with the move confirmed. Large tech companies likely perceive the regulatory environment for AI partnerships as easier to navigate under President Donald Trump than under former President Joe Biden, said William Kovacic, director of the competition law center at George Washington University. Trump's antitrust enforcers have said they do not want to regulate how AI develops, but have also displayed a suspicion of large tech platforms, he added. "That would lead me to think they will keep looking carefully at what the firms do. It does not necessarily dictate that they will intervene in a way that would discourage the relationships," Kovacic said. Federal Trade Commission probes into past "aquihire" deals appear to be at a standstill. Under the Biden administration, the FTC opened inquiries into Amazon's deal to hire top executives and researchers from AI startup Adept, and Microsoft's $650 million deal with Inflection AI. The latter allowed Microsoft to use Inflection's models and hire most of the startup's staff, including its co-founders. Amazon's deal closed without further action from the regulator, a source familiar with the matter confirmed. And, more than a year after its initial inquiry, the FTC has so far taken no enforcement action against Microsoft over Inflection, though a larger probe over practices at the software giant is ongoing. A spokesperson for the FTC declined to comment on Friday. David Olson, a professor who teaches antitrust law at Boston College Law School, said it was smart of Meta to take a minority nonvoting stake. "I think that does give them a lot of protection if someone comes after them," he said, adding that it was still possible that the FTC would want to review the agreement. The Meta deal has its skeptics. U.S. Senator Elizabeth Warren, a Democrat from Massachusetts who is probing AI partnerships involving Microsoft and Google, said Meta's investment should be scrutinized. "Meta can call this deal whatever it wants - but if it violates federal law because it unlawfully squashes competition or makes it easier for Meta to illegally dominate, antitrust enforcers should investigate and block it," she said in a statement on Friday. While Meta faces its own monopoly lawsuit by the FTC, it remains to be seen whether the agency will have any questions about its Scale investment. The U.S. Department of Justice's antitrust division, led by former JD Vance adviser Gail Slater, recently started looking into whether Google's partnership with chatbot creator Character.AI was designed to evade antitrust review, Bloomberg News reported. The DOJ is separately seeking to make Google give it advance notice of new AI investments as part of a proposal to curb the company's dominance in online search. (Reporting by Jody Godoy and Milana Vinn in New York; Editing by Chris Sanders and Matthew Lewis)

Meta invests $14.3 billion in Scale AI, hires its CEO to lead new AI Superintelligence lab

Meta aims to make Meta AI a leading assistant and advance general intelligence by 2025. Meta has officially announced plans to restart its artificial intelligence efforts, investing $14.3 billion to acquire a 49% stake in Scale AI. It has also hired its CEO, Alexandr Wang, to lead a new AI lab aimed at developing "superintelligence." The company has confirmed that this is one of the largest AI investments this year, and Wang will play a key role at Meta, reporting directly to CEO Mark Zuckerberg. Wang will continue to serve on Scale's board and even oversee leadership of Meta's new AI project. The company hopes that this move will be a turning point for the tech giant, which has found it difficult to stay up with competitors in the race for cutting-edge AI development. Ashely Zandy, the company's spokesperson, stated that in the upcoming weeks, more information about the initiative and its team will be made public. This comes as Meta is under increasing pressure to create innovative AI products. The company's launch of the Llama 4 model was hampered by delays and questions about benchmark manipulation. Mark Zuckerberg, on the other hand, has increased his efforts to hire, reaching out to leading researchers at companies like Google directly. Also read: Meta AI is getting video editing capabilities: All you need to know A major force in the AI ecosystem, Scale AI has collaborated with major firms like Google and OpenAI to annotate and label training data. Wang has since moved to Meta, and Scale has named Jason Droege, a former chief strategy officer, as CEO. Wang wrote in a memo to staff members that Meta's investment marks a significant turning point for Scale. He added that while equity opportunities for future growth would be retained, proceeds would be divided among qualified shareholders. This follows Meta CEO Mark Zuckerberg's announcement of two major objectives for 2025: establishing Meta AI as the leading personal assistant and paving the way for artificial general intelligence. In the meantime, the business unveiled a stand-alone Meta AI app with a social feed.