Meta's massive investment in Scale AI represents a strategic pivot in the company's artificial intelligence ambitions, as CEO Mark Zuckerberg seeks to accelerate Meta's position in the increasingly competitive AI race.
The deal, finalized on June 12, gives Meta a 49% non-voting stake in Scale AI for $14.3 billion, valuing the data-labeling startup at $29 billion. As part of the arrangement, Scale AI's 28-year-old CEO Alexandr Wang will join Meta to work on the company's 'superintelligence' efforts while still maintaining his position on Scale AI's board.
The investment comes at a critical time for Meta, as Zuckerberg has grown increasingly frustrated with his company's standing in artificial intelligence. Despite making AI Meta's top priority for 2025, the company's latest Llama 4 AI models received a tepid response from developers when released in April. This disappointment has led Zuckerberg to deprioritize Meta's Fundamental Artificial Intelligence Research unit (FAIR) in favor of more product-oriented teams.
Founded in 2016, Scale AI provides vast amounts of labeled data crucial for developing sophisticated AI tools like OpenAI's ChatGPT. The company's business model involves contracting with AI companies who often share proprietary data and prototype products for which Scale's workers provide data-labeling services. With Meta now taking a 49% stake, some competitors are concerned about potential exposure of their research priorities and technical blueprints to a rival.
The acquisition has already caused ripples in the industry. Google, Scale AI's largest customer, reportedly plans to cut ties with the company following the Meta deal announcement. Google had planned to pay Scale AI approximately $200 million this year for human-labeled training data crucial for developing its Gemini AI models. The Meta investment has effectively doubled Scale AI's valuation from $14 billion to $29 billion.
Zuckerberg is assembling a secretive new team, referred to internally as a 'superintelligence' group, with an audacious goal: to outstrip other tech companies in achieving artificial general intelligence (AGI). The launch of Meta's Llama 4 model earlier this year was expected to position the company competitively against OpenAI and Google, but instead received a lukewarm response, with developers citing limited capabilities compared to other cutting-edge systems.
This acquisition represents not just a financial investment but a strategic talent acquisition. As Wang takes a prominent role in Meta's AI strategy, the company gains his expertise and potentially "collective intelligence on how to build a better ChatGPT." As one competitor noted, "When Meta is buying them, they're buying their intelligence" about how competitors like OpenAI are building their consumer chatbots and AI models.