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Meta is set to inject approximately $15 billion into Scale AI, a data-labelling startup, and recruit the company’s co-founder along with top researchers. This substantial investment marks one of the largest deals of its kind as Meta aims to close the gap with its competitors in the tech industry.
The anticipated agreement, which might be officially announced this week, would grant Meta a 49% ownership of Scale AI, valuing the startup at around $28 billion according to insiders. This move would signify the second consecutive year in which Scale AI has achieved a doubling in its valuation.
Meta’s decision to invest in Scale AI and poach its top talent is part of a strategic initiative to establish a “superintelligence” lab that can surpass the capabilities of other tech giants like OpenAI, Anthropic, and Google, all of whom are also working on developing models that aim to surpass human intelligence levels, as reported by sources familiar with the matter.
For comments on this development, both Scale AI and Meta have chosen to remain silent for the time being.
Stay tuned for more updates on Meta’s latest large language model, Llama 4, which received mixed reviews from critics due to its underperformance on independent reasoning and coding benchmarks.
Meanwhile, Meta faces increasing competition from rivals such as Google, OpenAI, and Anthropic, who have unveiled their own powerful “reasoning” models that excel at problem-solving through systematic breakdowns. Additionally, Meta is under pressure from open-source competitors like China’s DeepSeek, who have managed to create formidable models at a fraction of the cost.
Despite Meta’s substantial market capitalization of nearly $2 trillion, its progress in generative artificial intelligence has been inconsistent, leading to multiple reorganizations under the leadership of CEO Mark Zuckerberg. In April, Meta announced the departure of Joelle Pineau, the vice-president of AI research.
The 28-year-old billionaire paper, Alexandr Wang, who co-founded Scale AI in 2016, is expected to join Meta’s “superintelligence” lab, as reported first by The New York Times. Bloomberg and The Information were the first to report on the details of Meta’s investment in Scale AI.
Scale AI specializes in the meticulous labeling of data used to train advanced AI models, ensuring accuracy in the process.
Wang has cultivated strong relationships with prominent investors and technologists in Silicon Valley, such as OpenAI’s Sam Altman, positioning Scale AI as a valuable resource for companies working on autonomous vehicles and generative AI models.
However, sources familiar with Wang’s work suggest that his strengths lie in promoting the company rather than managing its workforce or advancing AI research.
Jason Droege, who transitioned to Scale AI from Uber Eats less than a year ago, was expected to assume the role of chief executive from his current position as chief strategy officer.
As for the remaining employees of Scale AI, their future is uncertain as Wang had previously expressed interest in taking the startup public. Nevertheless, the potential deal with Meta has cast doubt on the realization of that goal.
In response to investor concerns about its concentrated services, Scale AI has been exploring ways to diversify its revenue streams, focusing on developing custom applications for enterprises and pursuing government contracts.
Recent acquisitions in the tech industry, such as Microsoft’s $650 million deal to acquire Inflection and Google’s $2.7 billion agreement with Character AI, underscore the competitive landscape for talent and technology within the sector.
Large tech companies have adopted bespoke structures in these acquisitions to navigate regulatory scrutiny, although both Google and Microsoft have faced antitrust investigations despite their efforts.
