Meta in talks to invest billions in Scale AI data labeling startup

Meta is in advanced talks to invest billions of dollars in Scale AI, a San Francisco-based startup that specializes in data labeling and preparation for artificial intelligence training systems. The potential investment would be unusual for Meta, which typically avoids external investments, and signals continued Big Tech interest in AI infrastructure companies amid intensifying competition for AI leadership.

What you should know: Scale AI has built its business around armies of contract workers who label and “clean” vast amounts of data to make it suitable for training AI systems.
• The company, founded in 2016 by Alexandr Wang and Lucy Guo, serves major clients including Microsoft, Cohere, Etsy, and OpenAI.
• Scale has already raised more than $1 billion from investors including Index Ventures and Founders Fund.
• The startup has expanded beyond data services into enterprise and public sector consulting, dispatching engineers to help companies and governments build AI programs.

The big picture: This investment aligns with Meta CEO Mark Zuckerberg’s aggressive AI strategy since OpenAI’s ChatGPT launch in late 2022.
• Meta has integrated AI across its product portfolio, including smart glasses and the recently released Meta AI app.
• The company has positioned itself as a champion of open-source AI, encouraging developers to build applications using its freely available AI models.

Strategic context: Meta and Scale AI already have established ties through defense sector initiatives.
• In November, Meta shifted its policy to allow U.S. government agencies and contractors to use its AI models for military purposes.
• The company partnered with defense contractors Booz Allen and Lockheed Martin on these initiatives, with Scale AI among the participating startups.

Why this matters: The potential deal underscores how tech giants are securing access to high-quality training data, which has become a critical bottleneck in AI development as companies race to build more sophisticated models.