Meta eyes $10 billion investment in AI startup Scale AI

Meta Platforms Inc. is in talks to invest over $10 billion in Scale AI, a fast-growing artificial intelligence startup. If finalized, the deal could mark one of the largest private funding rounds ever and Meta’s most significant external AI investment to date. This would signal a strategic shift for Meta, which has historically prioritized internal AI development.

Founded in 2016 by Alexandr Wang, Scale AI specializes in data labeling services crucial for training machine learning models. The company’s technology assists in cleaning, tagging, and structuring data, enabling AI models to learn effectively. This positions Scale AI as a key player in the ongoing generative AI boom.

Scale AI already has established itself with clients like Microsoft and OpenAI.

The startup was last valued at $14 billion in a 2024 funding round supported by both Meta and Microsoft. More recently, Bloomberg reported Scale AI was considering a tender offer valuing it at $25 billion, reflecting its rapid revenue growth from $870 million in 2024 to a projected $2 billion in 2025.

Neither Meta nor Scale AI has commented on the investment discussions. The terms are still being finalized and are subject to change. The proposed investment signals a sharp turn in Meta’s AI strategy.

Until now, Meta has relied primarily on in-house research and open-source initiatives like its Llama large language model (LLM). CEO Mark Zuckerberg declared in January that AI would be Meta’s top priority, outlining plans to spend up to $65 billion on AI in 2025. Llama powers Meta’s AI chatbot integrated into Facebook, Instagram, and WhatsApp and is already used by over 1 billion people monthly.

Scale AI’s growing role in defense technology may also be part of Meta’s motivation. The two companies are already collaborating on Defense Llama, a specialized version of Meta’s LLM adapted for military use.

Last week, Meta partnered with Anduril Industries, a defense contractor, to co-develop AI-powered helmets with augmented and virtual reality for the U.S. military. Meta has recently approved the use of its AI models by U.S. government agencies and contractors, a rare move in Big Tech.

Meanwhile, Scale AI has also deepened its federal footprint. Earlier this year, it secured a U.S. Department of Defense contract for AI agent technology, which the company hailed as a “significant milestone in military advancement.”

Meta’s potential mega-investment in Scale could be a bold step to not only keep pace with peers but also redefine its position as a leader in both commercial and military-grade AI solutions.