Meta in talks for Scale AI investment that could top US$10b
Meta Platforms Inc is reportedly in discussions to invest a significant amount into artificial intelligence (AI) startup Scale AI, with the investment potentially surpassing US$10 billion in value. Should the deal go through, it could mark one of the largest private company funding events to date.
While the terms of the investment have not been finalized and may still undergo changes, sources familiar with the matter have chosen to remain anonymous, citing the sensitive nature of the information. Representatives for both Scale and Meta have declined to provide any comments on the matter.
Scale AI and its Role in the Industry
Scale AI, known for providing data labelling services to assist companies in training their machine-learning models, counts tech giants such as Microsoft Corp and OpenAI among its clientele. The startup's value was last estimated at approximately US$14 billion in a funding round back in 2024, which also saw investments from Meta and Microsoft.
In a bid to keep up with the burgeoning field of generative AI, Scale AI has positioned itself as a key player in the industry. Earlier reports indicated that the startup was exploring a tender offer that could potentially raise its valuation to US$25 billion.
Meta's Strategic Investment
Should the investment proceed as planned, it would mark Meta's most sizable external investment in the field of AI. Unlike its peers in the Big Tech space, Meta has historically relied on internal research initiatives and a more collaborative development approach to drive advancements in AI technology.
In contrast, companies like Microsoft, Amazon.com, and Alphabet have poured billions into AI-focused ventures. Meta CEO Mark Zuckerberg has underscored the importance of AI as a top priority for the company, allocating a substantial budget of up to US$65 billion for related projects in the current year.
Collaboration and Growth
Scale AI, founded in 2016 by CEO Alexandr Wang, has experienced rapid growth in recent years. With reported revenue of US$870 million in the previous year, the startup anticipates a significant revenue surge to reach US$2 billion by 2025.
Emphasizing the critical role of quality data for effective AI training, Scale leverages a large pool of contract workers to refine and tag images, texts, and other data essential for AI applications.
Shared Interests and Defence Initiatives
Both Scale AI and Meta share a mutual interest in defense technology. Meta's recent collaboration with defense contractor Anduril Industries Inc highlights its commitment to developing innovative products for the military, including an AI-powered helmet with augmented reality features.
Furthermore, Meta has authorized various US government agencies and defense contractors to leverage its AI models for diverse applications. Notably, Meta and Scale are collaborating on the "Defense Llama" program, focusing on adapting Meta's Llama language model for military purposes.
With Scale increasingly involved in developing AI solutions for defense applications, the startup secured a contract with the Defense Department earlier this year, marking a significant milestone in advancing military technology.
Read also: Meta set to throw billions at startup Scale that leads AI data market
