Meta eyes $10 billion investment in data labeling AI startup Scale AI

Meta Platforms is reportedly negotiating a multibillion-dollar investment in Scale AI, a leading data labeling firm, potentially marking its largest external AI funding to date

Meta Platforms is reportedly in advanced discussions to invest over $10 billion in artificial intelligence startup Scale AI. According to a Bloomberg report, the financing, if finalised, would represent Meta's largest external investment in AI to date and one of the most significant private funding rounds in the sector's history .

 

The terms of the deal are reportedly still under negotiation and could change. So far, Meta and Scale AI have not commented on the discussions.

 

Scale AI's growth and valuation trajectory

 

Founded in 2016 by CEO Alexandr Wang, Scale AI specialises in data labeling services essential for training machine learning models. The company has experienced rapid growth, generating approximately $870 million in revenue in 2024 and projecting to double that figure to $2 billion in 2025. 

 

As of May 2024, Scale AI was valued at $13.8 billion following a $1 billion Series F funding round led by Accel, with participation from investors including Amazon, Meta, and Nvidia.

 

Scale AI and Meta have previously collaborated on Defense Llama, a large language model built on Meta's Llama 3 architecture, tailored for US national security applications. 

 

Defense Llama is designed to assist military planners and intelligence analysts with tasks such as operational planning and threat assessment.

 

Meta's AI investment strategy

 

This potential investment aligns with Meta CEO Mark Zuckerberg's commitment to making AI a central focus for the company. In January, Zuckerberg announced plans to allocate up to $65 billion for AI-related projects in 2025, including infrastructure expansion and team growth.

 

Meta's approach to AI development has traditionally emphasised in-house research and open-source models. However, this prospective deal with Scale AI indicates a strategic shift towards significant external investments, mirroring moves by other tech giants like Microsoft and Amazon, which have invested heavily in AI startups such as OpenAI and Anthropic.

 

Should the investment proceed, it would not only bolster Scale AI's position in the AI ecosystem but also signal Meta's intensified commitment to advancing AI capabilities. The collaboration could accelerate the development of AI technologies across various sectors, including national security, and reshape competitive dynamics within the industry.