[NEW YORK] Meta Platforms is in discussions to make a multi-billion dollar investment in artificial intelligence (AI) startup scale AI, according to sources familiar with the issue.
Funding could exceed the value of US$10 billion, according to some sources, making it one of the biggest private company fundraising events ever.
Sources say the terms of the transaction have not been finalized and are still subject to change.
Representatives of scale and meta declined to comment.
Scale AI, including Microsoft and Openai, has provided data labeling services to help businesses train machine learning models, and has become a key beneficiary of the generation AI boom. The startup was last valued at around US$14 billion in 2024 and was a funding round that included support from Meta and Microsoft. Earlier this year, Bloomberg reported that it was in discussions on a tender offer that will be valued at a scale of USD 25 billion.
This is Meta's biggest external AI investment in history and a rare move for the company. The social media giant has previously relied on more open development strategies to improve AI technology, mainly in addition to in-house research. Meanwhile, large tech peers have invested heavily. Microsoft has put over US$13 billion in Openai, while both Amazon.com and Alphabet have put billions into rival humanity.
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Part of these companies' investments came through credits using computing power. Meta does not have a cloud business. It is also unclear what form Meta's investment will be.
Chief Executive Mark Zuckerberg prioritized AI meta prioritization, saying in January the company would spend as much as US$65 billion on related projects this year.
The company's push includes efforts to make llamas a global industry standard. Meta's AI chatbot (already available on Facebook, Instagram and WhatsApp) is used by 1 billion people per month.
Co-founded in 2016 by CEO Alexandr Wang, Scale is growing rapidly. The startup generated revenue of US$870 million last year, and is expected to more than double to US$2 billion in 2025.
Scale plays a key role in making AI data available to businesses. Because AI is as good as the data that goes into it, Scale can be organized using contract workers' scads and tagged images, text and other data for use in AI training.
Scale and meta share the interest in defense technology. Last week, Meta announced a new partnership with defense contractor Andurill Industries, developing products for the US military, including AI-powered helmets with virtual and augmented reality features. META also grants approval for US government agencies and defense contractors to use the AI model.
The company has already partnered with a program scale called Defense Lama, a version of Meta's major llama language model aimed at military use.
Scale is increasingly working with the US government to develop AI for defensive purposes. Earlier this year, the startup said it had won a contract with the Department of Defense to tackle AI agent technology. The company called the contract “an important milestone in military progress.” Bloomberg
