Scale AI Confirms Meta Investment, CEO Alexandr Wang Departs for Meta

Scale AI, a prominent data-labeling company, has officially confirmed a substantial investment from Meta, valuing the startup at an impressive $29 billion. The announcement, made on Friday, also included the news that Scale AI’s co-founder and CEO, Alexandr Wang, will be stepping down from his current role to join Meta, where he will contribute to the tech giant’s artificial intelligence initiatives. The original announcement can be found on the Scale AI blog (Scale AI Blog).

Reports suggest that Meta’s investment amounts to approximately $14.3 billion for a 49% stake in Scale AI. This strategic move underscores the critical role Scale AI plays in the generative AI landscape, providing crucial data production and labeling services for training large language models. Further details on the investment can be found via The Economic Times (The Economic Times).

Meta has officially acknowledged the investment and partnership. A company spokesperson stated, “Meta has finalized our strategic partnership and investment in Scale AI. As part of this, we will deepen the work we do together producing data for AI models and Alexandr Wang will join Meta to work on our superintelligence efforts. We will share more about this effort and the great people joining this team in the coming weeks,” as reported by TechCrunch.

Taking over as interim CEO is Jason Droege, Scale AI’s current chief strategy officer. The company has clarified that the investment will be used to compensate investors and shareholders, as well as to stimulate future growth. Scale AI emphasized that it will maintain its independence, with Wang continuing to serve as a director on its board.

According to TechCrunch, this investment signals Meta’s strategic intent to bolster its AI capabilities amidst fierce competition from industry rivals such as Google, OpenAI, and Anthropic. Meta’s AI model releases have been trailing behind those of its competitors (TechCrunch).
Further compounding the challenge, data from SingalFire indicates that Meta experienced a loss of 4.3% of its top talent to competing AI labs in the past year (SingalFire Report).

For the last several years, leading AI labs such as OpenAI have relied on Scale AI to produce and label data that’s used to train models. In recent months, Scale AI and its data annotation competitors have started hiring highly skilled people, such as PhD scientists and senior software engineers, to generate high-quality data for frontier AI labs.

Notably, Scale AI secured $1 billion in funding last year from investors including Amazon and Meta, which doubled its valuation to $13.8 billion (TechCrunch). This latest investment further solidifies Scale AI’s position as a key player in the AI ecosystem.