Meta in Talks to Invest Over $10 Billion in Scale AI, Potentially Largest External AI Deal Yet

Meta is reportedly in talks to make a multi-billion dollar investment in Scale AI, with the deal possibly exceeding $10 billion. If finalized, this would mark Meta’s largest external investment in artificial intelligence and one of the most significant funding events for any private company. Scale AI, led by CEO Alexandr Wang, specializes in providing data labeling services to companies like Microsoft and OpenAI, a crucial step in training AI models. The company predominantly uses contractors to perform this work, a practice that recently drew scrutiny from the Department of Labor. However, the department has since dropped its investigation into potential employee misclassification and underpayment issues. According to Bloomberg, Scale AI generated $870 million in revenue last year and projects an increase to $2 billion this year. This rapid growth underscores the company's significance in the AI industry. Meta has a history of investing in Scale AI, having participated in the company’s $1 billion Series F funding round, which valued Scale AI at $13.8 billion. Beyond financial support, Scale AI has leveraged Meta’s expertise to develop specialized AI models. One notable example is Defense Llama, a large language model tailored for military applications, which was built using Meta’s Llama 3 foundation model. This potential investment would not only solidify Meta’s commitment to advancing AI but also position Scale AI at the forefront of AI development, capable of delivering sophisticated solutions across various sectors, including defense. The collaboration between these two tech giants highlights the growing importance of data labeling and AI model training in the broader landscape of artificial intelligence advancements.