Google to Sever Ties with Scale AI Following Meta’s $29 Billion Investment
Google, the largest customer of Scale AI, plans to cut ties with the AI data-labeling startup after Meta took a 49% stake in the company, valuing it at $29 billion. The decision comes as other major tech companies, including Microsoft and OpenAI, also consider distancing themselves from Scale AI.
Google had planned to pay Scale AI around $200 million this year for human-labeled training data crucial for developing its AI models, including its ChatGPT competitor, Gemini. The search giant has already begun conversations with Scale AI’s rivals to shift away from its services.
The loss of Google’s business is significant for Scale AI, which generated $870 million in revenue in 2024, with Google accounting for approximately $150 million of that amount last year. Other major tech companies, including Microsoft and Elon Musk’s xAI, are also reevaluating their relationships with Scale AI.
The Meta-Scale AI deal has raised concerns among AI labs that contracting with Scale AI could expose their research priorities and technical blueprints to Meta, a competitor in the AI space. As a result, many are seeking to hire in-house data-labelers to maintain data security.
“The Meta-Scale deal marks a turning point,” said Jonathan Siddharth, CEO of Turing, a Scale AI competitor. “Leading AI labs are realizing neutrality is no longer optional, it’s essential.”
Scale AI’s competitors, such as Labelbox and Handshake, are poised to benefit from the situation. Labelbox’s CEO, Manu Sharma, expects to generate “hundreds of millions of new revenue” by the end of the year from customers fleeing Scale AI.
As part of the Meta deal, Scale AI’s CEO, Alexandr Wang, will take a top position leading Meta’s AI efforts, further fueling concerns among AI labs about potential data exposure.
The development highlights the growing importance of data security and neutrality in the AI industry, with major players seeking to protect their proprietary information and research priorities.
