Scale AI Seeks $25 Billion Valuation in Potential Tender Offer Amid AI Boom

Scale AI seeking valuation as high as $25 billion in potential tender offer, Business Insider reports

March 28 (Reuters) - Artificial intelligence startup Scale AI is seeking a valuation as high as $25 billion in a potential tender offer as it looks to capitalize on the booming demand for the technology, Business Insider reported on Friday, citing multiple sources. Top tech companies are racing to build AI into their products and services. Startups catering to the surge in demand for AI chips and machine learning have been a bright spot in the private funding market. Terms of California-based Scale AI's tender offer, where investors and/or the company buy shares from existing shareholders, are being discussed and the final valuation could change, the report said. The startup, which was valued at nearly $14 billion in a funding round last year, did not immediately respond to Reuters' request for comment on the report. Founded in 2016, Scale AI is backed by tech giants Nvidia (NVDA.O), opens new tab, Amazon (AMZN.O), opens new tab and Meta (META.O), opens new tab. The company provides vast amounts of accurately labeled data, which is pivotal for training sophisticated tools like OpenAI's ChatGPT. The U.S. Department of Labor is investigating Scale AI for its compliance with the Fair Labor Standards Act. Reporting by Juby Babu in Mexico City; Editing by Shreya Biswas Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Society & EquityESG InvestorsSocial Impact

Scale AI seeking valuation as high as $25 billion in potential tender offer: report

Top tech companies are racing to build AI into their products and services. Startups catering to the surge in demand for AI chips and machine learning have been a bright spot in the private funding market.Artificial intelligence startup Scale AI is seeking a valuation as high as $25 billion in a potential tender offer as it looks to capitalize on the booming demand for the technology, Business Insider reported on Friday, citing multiple sources. Top tech companies are racing to build AI into their products and services. Startups catering to the surge in demand for AI chips and machine learning have been a bright spot in the private funding market. Terms of California-based Scale AI's tender offer, where investors and/or the company buy shares from existing shareholders, are being discussed and the final valuation could change, the report said. The startup, which was valued at nearly $14 billion in a funding round last year, did not immediately respond to Reuters' request for comment on the report. Founded in 2016, Scale AI is backed by tech giants Nvidia, Amazon and Meta. The company provides vast amounts of accurately labeled data, which is pivotal for training sophisticated tools like OpenAI's ChatGPT. The US Department of Labor is investigating Scale AI for its compliance with the Fair Labor Standards Act.

Nvidia-Backed Scale AI Reportedly Eyes $25 Billion Valuation In Tender Offer Amid Explosive Demand For Labeled Data And Machine Learning Tools - Meta Platforms (NASDAQ:META), Amazon.com (NASDAQ:AMZN)

Backed by companies like Nvidia Corp. NVDA, Amazon.com Inc. AMZN, and Meta Platforms Inc. META, Scale AI is reportedly seeking a valuation of up to $25 billion in a new tender offer. What Happened: Scale AI is in talks to launch a tender offer that could value the company at nearly double its previous valuation of $14 billion from last year, reported Business Insider, citing multiple sources who have seen the deal. The terms of the deal, where existing shares are sold by early investors or employees, are still being finalized, and the final valuation could fluctuate, the report noted. Founded in 2016, the San Francisco-based company plays a critical role in the AI ecosystem by providing high-quality labeled data, essential for training models like OpenAI's ChatGPT. However, the company is also facing scrutiny. The U.S. Department of Labor is reportedly investigating Scale AI's compliance with the Fair Labor Standards Act, raising questions about labor practices amid its rapid growth. Subscribe to the Benzinga Tech Trends newsletter to get all the latest tech developments delivered to your inbox. Why It's Important: On Friday, Elon Musk also acquired his social media platform X through xAI in a $33 billion deal. Last month, it was reported that Ilya Sutskever, OpenAI's co-founder and former chief scientist, is reportedly securing over $1 billion in funding for his AI startup, Safe Superintelligence (SSI), driving its valuation past $30 billion. SoftBank Group SFTBF SFTBY is also reportedly in discussions to lead a new funding round for OpenAI, aiming to raise $40 billion. This investment could push the ChatGPT creator's valuation to $300 billion, marking a record for private company funding. Check out more of Benzinga's Consumer Tech coverage by following this link. Read Next: Apple's iPad Turns 15 Today: Here's A Throwback To When Steve Jobs Explained Called It The 'Third Category' After Phones And Notebooks Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors. Photo courtesy: Shutterstock AMZNAmazon.com Inc$192.66-4.32%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum75.92Growth94.54Quality77.18Value48.28Price TrendShortMediumLongOverviewMETAMeta Platforms Inc$575.58-4.48%NVDANVIDIA Corp$109.01-2.17%SFTBFSoftBank Group Corp$52.86-%SFTBYSoftBank Group Corp$25.68-2.21%Market News and Data brought to you by Benzinga APIs

Scale AI seeking valuation as high as $25 billion in potential tender offer, Business Insider reports

(Reuters) - Artificial intelligence startup Scale AI is seeking a valuation as high as $25 billion in a potential tender offer as it looks to capitalize on the booming demand for the technology, Business Insider reported on Friday, citing multiple sources. Top tech companies are racing to build AI into their products and services. Startups catering to the surge in demand for AI chips and machine learning have been a bright spot in the private funding market. Terms of California-based Scale AI's tender offer, where investors and/or the company buy shares from existing shareholders, are being discussed and the final valuation could change, the report said. The startup, which was valued at nearly $14 billion in a funding round last year, did not immediately respond to Reuters' request for comment on the report. Founded in 2016, Scale AI is backed by tech giants Nvidia, Amazon and Meta. The company provides vast amounts of accurately labeled data, which is pivotal for training sophisticated tools like OpenAI's ChatGPT. The U.S. Department of Labor is investigating Scale AI for its compliance with the Fair Labor Standards Act. (Reporting by Juby Babu in Mexico City; Editing by Shreya Biswas)