Google to Sever Ties with Scale AI Following Meta’s Significant Investment
Google, the largest customer of AI data-labeling startup Scale AI, is planning to cut ties with the company following Meta’s acquisition of a 49% stake in Scale, valued at $29 billion. The move has raised concerns among Scale’s major clients, including Microsoft and Elon Musk’s xAI, who fear proprietary data exposure to a competitor.
Meta’s $14.3 billion investment in Scale AI includes the transition of Scale’s CEO, Alexandr Wang, to Meta, where he will lead efforts to develop ‘superintelligence.’ This has intensified worries among Scale’s clients that their sensitive research priorities and technical blueprints could be accessed by Meta through Scale’s data-labeling operations.
Google, which had planned to pay Scale $200 million this year, has already begun discussions with Scale’s competitors to shift its workload. The company had been diversifying its data service providers for over a year, but Meta’s investment has accelerated Google’s push to exit all key contracts with Scale.
Microsoft and xAI are also pulling back, while OpenAI, a smaller Scale customer, scaled down its reliance months ago but will continue working with Scale as one of its many vendors.
Scale AI, which serves self-driving car companies, the U.S. government, and generative AI firms, relies heavily on a few major clients. A Scale spokesperson emphasized that the company remains independent and committed to safeguarding customer data.
The potential loss of key clients like Google could significantly impact Scale’s operations. The shift underscores growing concerns among AI developers about data security and competitive risks as industry giants like Meta deepen their influence in the AI ecosystem.
