There are reports that Meta is considering a major investment in Scale AI. And according to Bloomberg, the deal may exceed $10 billion.
If finalized, this would be Meta’s largest external investment in AI. It could also become one of the biggest private tech funding rounds in history.
Meta already holds a stake in Scale AI: the tech giant participated in the company’s $1 billion Series F round valued at $13.8 billion.
What Scale AI Does
Scale AI provides data labeling services for major tech firms like Microsoft and OpenAI.
These services help train AI models by supplying clean, labeled data necessary for creating high-performing models.
A Fast-Growing Company
Scale AI has seen rapid growth: in 2023, the company earned $870 million in revenue.
This year, the company expects to hit $2 billion in revenue. That kind of growth has drawn attention across Silicon Valley. Aside from labeling data, Scale AI is also developing its own tools.
One example is Defense Llama, a large language model (LLM) built using Meta’s Llama 3 technology and designed for military applications.
Labor Concerns and Government Scrutiny
Much of Scale AI’s work relies on contractors who handle the repetitive but vital tasks of data labeling.
Due to this heavy reliance on contractors, the U.S. Department of Labor launched an investigation in 2023.
The agency examined whether Scale AI was misclassifying workers and underpaying them.
That investigation has since closed, and no charges were filed. Still, the situation sparked public debate about labor rights in the AI industry.
Why Meta Wants a Bigger Stake
Meta has plans to develop powerful AI tools, like its Llama 3 language model. But training these tools effectively requires massive amounts of labeled data.
Partnering more deeply with Scale AI would give Meta direct access to these resources. It could also help reduce reliance on competitors like OpenAI.
A Trend
Meta’s intention towards Scale AI is a reflection of what’s happening on a larger scale. Microsoft has backed OpenAI.
Amazon and Google are working with Anthropic and Cohere. Now, Meta is positioning itself for a similar step.
Meta has not confirmed the deal, and Scale AI has also declined to comment publicly. But sources suggest the talks are advanced.
