Meta’s $14.8 Billion Investment in Scale AI Avoids Regulatory Review
Meta’s $14.8 billion investment in Scale AI, a data-labeling startup, doesn’t require review by U.S. antitrust regulators, but experts warn that scrutiny is still possible if the deal is found to harm competition.
The investment, announced on June 13, gives Meta a 49% nonvoting stake in Scale AI, which provides services to major companies and governments, including Meta competitors Microsoft and OpenAI. Scale AI’s CEO, Alexandr Wang, will join Meta while remaining on Scale’s board, with certain restrictions on his access to information.
Experts say that while the deal is structured to avoid regulatory pitfalls, such as cutting off competitors’ access to Scale’s services, it may still face scrutiny. “That would lead me to think they will keep looking carefully at what the firms do,” said William Kovacic, director of the competition law center at George Washington University.
The deal has drawn criticism from some quarters, with U.S. Senator Elizabeth Warren calling for scrutiny. “Meta can call this deal whatever it wants – but if it violates federal law because it unlawfully squashes competition or makes it easier for Meta to illegally dominate, antitrust enforcers should investigate and block it,” she said.
The regulatory environment for AI partnerships is expected to remain complex, with both the FTC and DOJ examining various deals. While Meta faces its own monopoly lawsuit by the FTC, it remains to be seen whether the agency will have any questions about its Scale investment.
