Meta Invests $14.3 Billion in Scale AI, Valuing Startup at $29 Billion
Meta, the parent company of Facebook, has made a significant investment in Scale AI, a data-labeling startup, valuing it at $29 billion. The deal, worth $14.3 billion, will see Meta take a 49% stake in Scale AI.
As part of the agreement, Scale AI’s 28-year-old CEO, Alexandr Wang, will join Meta to lead its superintelligence efforts. Wang, who co-founded Scale AI after dropping out of MIT, has been a prominent figure in Silicon Valley, raising funding from top venture capital firms and achieving billionaire status in his 20s.
The investment is Meta’s second-largest ever, after its $19 billion buyout of WhatsApp. However, the deal may raise concerns among Scale AI’s clients, who might worry that Meta could gain an unfair advantage through Wang’s continued role on Scale AI’s board.
Scale AI provides accurately labeled data for training AI models, a crucial component in the development of sophisticated tools like OpenAI’s ChatGPT. The company has previously received backing from investors such as Nvidia, Amazon, and Meta.
The deal is seen as a strategic move by Meta to bolster its AI capabilities, particularly in the area of superintelligence. Meta CEO Mark Zuckerberg is betting that Wang’s business acumen will help turn around Meta’s AI efforts, which have suffered from staff departures and delayed launches of new open-source AI models.
While the investment is a significant win for early venture capital investors in Scale AI, it remains to be seen how the deal will affect Scale AI’s relationships with its clients, including Meta’s competitors in the AI space.
