Huge investment from Mark Zuckerberg’s Meta Platforms into an AI startup has been confirmed, as the social networking giant ramps up its AI push.
San Francisco, California Scale AI announced in a blog post that a “significant new investment from Meta Platforms” that values Scale at over $29 billion.
It is widely reported that Meta is making a $14.3bn (£10.6bn) investment in Scale, which is one of the largest private company funding events of all time, emphasing the intense competition in the AI sector.
Image credit: Meta
Scale AI
It comes after it had been reported earlier this week that Meta was close to making a more than $10 billion (£7.4bn) investment in Scale AI.
This investment is Meta’s largest-ever external AI investment, after mostly relying on its own research in the past, along with an open-source development strategy for its Llama AI models, and vast expenditures on building AI compatible data centres.
In January Meta had stated it expected to spend up to $65bn this year on AI-related projects.
Now following its investment, Meta will also hold a minority of Scale’s outstanding equity.
But not only is Meta making a huge investment in Scale AI, but it is also poaching its founder and CEO, Alexandr Wang (and a small number of other Scale staff), to join a Meta team developing “superintelligence” at the tech giant.
Wang will “continue to serve as a director on the Scale board of directors and support Scale’s ongoing work to unlock the power of AI and keep human values at the forefront,” said the AI startup.
Scale had been founded in 2016 by Alexandr Wang, and provides data-labelling services for companies training machine-learning systems.
Data inputs are a key resource for AI companies and play a critical role in determining the quality of generated results.
Scale taps into this requirement by hiring large numbers of contract workers to clean up and tag images, text and other data for use in AI training.
The company generated $870m in revenue last year and reportedly expects sales to more than double to $2bn this year.
Interim CEO
Meanwhile Scale’s board has appointed chief strategy officer, Jason Droege, as the company’s Interim CEO.
“AI is one of the most revolutionary technologies of our time, with unlimited possibility and far-reaching influence on how people, businesses and governments succeed,” said Alexandr Wang. “Scale bridges the gap between human values and technology to help our customers realize AI’s full potential. Meta’s investment recognizes Scale’s accomplishments to date and reaffirms that our path forward – like that of AI – is limitless.”
Scale AI founder, and former CEO Alexandr Wang. Image credit Scale AI
“I’m delighted that Jason will lead the next steps in Scale’s journey and bring his experience and skill to continue its success,” Wang added. “Our bench is deep and I’m confident that we’ll continue best serving our valued customers, providing the highest quality data, and building customized AI applications that transform businesses and governments.”
“Meta’s new investment and our broadened commercial agreement is a testament to the incredible work and dedication of the entire Scale team, and the tremendous upside that lies ahead for Scale,” added Jason Droege, interim CEO.
AI ambitions
Meta has made AI a top priority and said last month its Meta AI chatbot assistant had risen to one billion monthly active users, boosted by its reach across Meta’s social media services.
The company said it is currently focusing on building the reach of Meta AI before building a business around the offering.
Chief executive Mark Zuckerberg said monetisation strategies could include inserting paid recommendations or a subscription plan.
Meta’s investment in Scale AI, as until now, it has bucked the trend of tech firms and mostly developed its own AI technology.
This was in contrast to the likes of Microsoft, which has invested more than $13bn in OpenAI.
Amazon and Google meanwhile have invested billions into Anthropic.
