Meta in talks to invest $10B in Scale AI: Report
What's the story
Meta Platforms Inc. is in talks to invest over $10 billion in the artificial intelligence (AI) start-up Scale AI, according to Bloomberg.
If finalized, the deal would be one of the largest private funding rounds ever.
The agreement is still under negotiation, and final terms could change as discussions between the companies continue.
Industry impact
Key player in the generative AI boom
Founded in 2016 by CEO Alexandr Wang, Scale AI has quickly become a key player in the generative AI boom.
The company provides data labeling services for machine learning (ML) model training and counts Microsoft and OpenAI among its clients.
In 2024, it was valued at about $14 billion after a funding round that included Meta and Microsoft's backing.
Investment scale
Meta's potential investment compared to Microsoft's OpenAI investments
The proposed investment from Meta would be its largest external AI investment to date.
This is a notable shift for the social media giant, which has mostly relied on in-house research and an open development strategy to advance its AI technology.
To put things into perspective, Microsoft's total investments in OpenAI have exceeded $13 billion, while Amazon and Alphabet have also invested billions in rival Anthropic.
Strategic focus
AI is a top priority for Mark Zuckerberg
Mark Zuckerberg, Meta's CEO, has made AI a top priority for the company. Earlier this year, he announced that the company would spend up to $65 billion on related projects in 2025.
One of these projects is Llama, an AI chatbot already available on Facebook, Instagram, and WhatsApp platforms. It currently serves one billion people per month globally.
Financial performance
Scale AI expects revenues to double by next year
Scale AI has seen rapid growth, with revenues of $870 million last year. The company expects its sales to more than double to $2 billion in 2025.
This is largely due to its role in preparing AI data for companies by employing numerous contract workers who clean and tag images, text, and other data for ML training.
Tech partnership
Defense Llama project
Meta and Scale AI are also collaborating on a project called Defense Llama, a military version of Meta's Llama large language model.
This comes after Meta announced a 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.