Meta Invests Significantly in Scale AI, Valuing Startup at $29 Billion; CEO Alexandr Wang to Join Meta’s AI Team

Data-labeling company Scale AI confirmed on Friday that it has received a substantial investment from Meta, valuing the startup at $29 billion. Concurrently, the company's co-founder and CEO, Alexandr Wang, announced he is stepping down to join Meta and contribute to the company's artificial intelligence (AI) initiatives. Meta's investment reportedly amounts to around $14.3 billion, giving them a 49% stake in Scale AI. This move underscores Meta's commitment to enhancing its AI capabilities, particularly in the realm of large language models, which are crucial for the development of advanced AI systems. A Meta spokesperson confirmed the investment, stating, "We have finalized our strategic partnership with Scale AI. This collaboration will deepen our work in producing high-quality data for AI models, and Alexandr Wang will join Meta to work on our superintelligence efforts. We will provide more details about this initiative and the talented individuals joining our team in the coming weeks." Jason Droege, currently Scale AI's chief strategy officer, will serve as the interim CEO. Scale AI noted that proceeds from Meta's investment will be used to compensate existing investors and shareholders, as well as to drive further growth. Despite the investment, Scale AI will remain an independent entity. Wang will continue to play a role at Scale AI as a board director. This strategic move by Meta comes at a critical time as the tech giant faces stiff competition from other major players in the AI field, such as Google, OpenAI, and Anthropic. These companies have been advancing their AI models at a rapid pace, and Meta has been struggling to keep up. According to data from SingalFire, Meta lost 4.3% of its top talent to rival AI labs last year, highlighting the challenges it faces in retaining expertise. Scale AI has been a crucial partner for several leading AI research organizations, including OpenAI, providing the necessary data labeling and annotation services to train sophisticated models. Over the past few years, the demand for high-quality data has surged as AI labs push the boundaries of what these models can achieve. Recognizing this, Scale AI has stepped up its hiring efforts, attracting highly skilled professionals like PhD scientists and senior software engineers to ensure the quality of their data. Last year, Scale AI raised $1 billion from investors, including Amazon and Meta, which valued the company at $13.8 billion. This recent investment from Meta not only boosts Scale AI's financial position but also solidifies its importance in the AI ecosystem. The partnership between Meta and Scale AI is expected to accelerate the development of AI technologies, providing both companies with valuable resources and expertise. As the AI landscape continues to evolve, this alignment of interests could prove vital for Meta's ongoing efforts to stay competitive and innovative in the field.