OpenAI drops Scale AI as data provider after Meta deal
What's the story
OpenAI is terminating its partnership with data-labeling start-up Scale AI. The decision aligns with their ongoing strategy to seek more specialized data providers for building advanced AI models. This move comes shortly after Meta invested billions in Scale AI and hired its founder. An OpenAI spokesperson confirmed that Scale accounted for a small portion of their overall data needs.
Strategic change
OpenAI was already reducing reliance on Scale AI
The spokesperson also clarified that OpenAI was already in the process of reducing its reliance on Scale before Meta, a competitor to OpenAI, took a 49% stake in the firm. This strategic shift is part of OpenAI's transition toward building more sophisticated AI models capable of human-like reasoning and agent-like models that can perform tasks with minimal user input.
Business uncertainty
Uncertainty surrounding Scale's business after Meta's unusual deal
OpenAI's decision adds to the uncertainty surrounding Scale's business after Meta's unusual deal. The social media giant is investing $14.3 billion in Scale and has hired its CEO, Alexandr Wang, for a new "superintelligence" unit focused on creating more powerful AI software. Other employees from Scale are also expected to join Wang at Meta for this project.
Clarification
Scale AI reassures clients about confidentiality
In response to the speculation that Meta would get special treatment from the deal, Scale AI's general counsel published a blog post on Wednesday. The executives clarified that they wouldn't share confidential information from other customers with Meta and Wang wouldn't be involved in day-to-day operations. Despite these assurances, it appears some of Scale AI's biggest customers are already moving away from the data provider.
Business pivot
Scale AI to focus on applications business
In light of these developments, Scale AI's interim CEO Jason Droege announced the company would "double down" on its applications business. This venture involves creating custom AI applications for governments and enterprises. The announcement comes as a response to the changing dynamics in the data labeling industry and Scale AI's shifting focus amid growing competition from other data providers.