Meta Platforms is making its biggest bet yet in the artificial intelligence race, finalizing a $14.8 billion deal to acquire a 49% stake in data labeling startup Scale AI. The investment, confirmed on June 10, comes as Meta CEO Mark Zuckerberg grows increasingly frustrated with his company's standing in the competitive AI landscape.
As part of the arrangement, Scale AI CEO Alexandr Wang will take a top position inside Meta, leading a new 'superintelligence' lab. This strategic move positions Wang, who has built a reputation as an ambitious leader with deep understanding of both AI's technical complexities and business applications, at the forefront of Meta's AI ambitions.
Founded in 2016, Scale AI has become a critical player in the AI ecosystem by providing vast amounts of labeled data crucial for developing sophisticated AI tools like ChatGPT. The company specializes in data annotation and curation services that are essential for training large language models. Scale AI was valued at $13.8 billion in a funding round last spring, generated approximately $870 million in revenue in 2024, and expects to bring in more than $2 billion this year. The company had over $900 million in cash on its balance sheet at the end of last year.
The acquisition comes at a critical time for Meta, as Zuckerberg has grown agitated that rivals like OpenAI appear to be ahead in both underlying AI models and consumer-facing applications. Meta has been deprioritizing its Fundamental Artificial Intelligence Research unit (FAIR) in favor of more product-oriented teams to improve its Llama family of AI models. The company's release of Llama 4 in April was not well received by developers, further frustrating Zuckerberg.
According to Bloomberg, Zuckerberg has been personally leading recruiting for the new superintelligence team of about 50 people and has even rearranged Meta's offices so the new hires sit near him. The company has reportedly offered compensation packages between seven and nine figures to AI researchers from top competitors, demonstrating its commitment to building cutting-edge AI capabilities.
The deal appears beneficial for Scale AI's investors, including Accel, Index Ventures, Founders Fund, and Greenoaks, as well as its current and former employees. By taking a large stake rather than acquiring Scale AI outright, Meta is following a similar strategy to companies like Google and Microsoft, which have invested in AI startups without fully acquiring them. This approach may help Meta avoid further scrutiny from regulators, as the company is currently on trial with the Federal Trade Commission for antitrust claims.