Meta Invests $14.3 Billion for 49% Stake in Scale to Boost AI Efforts

Meta has announced a significant investment in artificial intelligence, acquiring a 49% stake in Scale for $14.3 billion. This strategic partnership and investment reflect Meta's CEO Mark Zuckerberg's push to revitalize the company's AI efforts in the face of intense competition from rivals such as Google and OpenAI. Scale, which will remain an independent company, has seen its market value surge to over $29 billion following this deal. The agreement is set to substantially expand the commercial relationship between Scale and Meta.

As part of the deal, Meta has recruited Scale's CEO, Alexandr Wang, to join its team developing "superintelligence." Wang, who co-founded Scale with Lucy Guo in 2016, will remain on Scale’s board of directors. Jason Droege, previously Scale’s chief strategy officer, will take over as the interim CEO. Droege has a background in executive roles at Uber Eats and Axon.

Zuckerberg's focus on "superintelligence," a concept rival companies refer to as artificial general intelligence (AGI), marks a significant pivot for Meta. This shift comes after the company's 2021 all-in commitment to the metaverse, which involved changing the company's name and investing billions into advancing virtual reality and related technologies. The AI arms race, sparked by the debut of ChatGPT in 2022, has seen other big tech companies acquire talent and products from innovative AI startups without formal acquisitions. Microsoft, for instance, hired key staff from Inflection AI, while Google and Amazon have made similar moves with Character.AI and Adept, respectively.

Scale, founded by Wang and Guo, initially supplied human labor to improve AI systems by hiring workers to annotate images and videos. This service was crucial for companies like General Motors and Toyota, which used these annotations to enhance the capabilities of self-driving cars. More recently, Scale has expanded its services to include the commercialization of AI large language models, which are used by leading companies such as Anthropic, OpenAI, Meta, and Microsoft. The company helps fine-tune training data and test the performance of these models.

Wang has also built close relationships with the U.S. government, securing military contracts to supply AI tools to the Pentagon and attending President Donald Trump’s inauguration. Michael Kratsios, the head of Trump’s science and technology office, was an executive at Scale during Trump’s first and second terms. Meta has also begun providing AI services to the federal government.

Meta's approach to AI differs from its rivals. The company has released its flagship Llama system as an open-source product, allowing users to modify its key components. While Meta claims that over a billion people use its AI products each month, it is widely seen as lagging behind competitors like OpenAI and Google in encouraging consumer use of large language models. Meta has yet to release its purportedly most advanced model, Llama 4 Behemoth, despite previewing it in April as "one of the smartest LLMs in the world and our most powerful yet."

Meta's chief AI scientist, Yann LeCun, has expressed skepticism about the tech industry's current focus on large language models. LeCun, who won computer science's top prize in 2019 for his pioneering AI work, has emphasized Meta's interest in building AI systems that understand the physical world, have persistent memory, and can reason and plan. These characteristics, he argues, are largely absent in current large language models. LeCun co-founded Meta’s AI research division more than a decade ago with Rob Fergus, a fellow professor at New York University. Fergus recently returned to Meta after a 5-year absence to run the research lab, replacing the previous head.

Fergus has described Meta's commitment to long-term AI research as "unwavering," with the goal of building human-level experiences that transform the way we interact with technology. This strategic investment in Scale and the recruitment of Wang underscore Meta's determination to stay at the forefront of AI development, despite the challenges posed by its competitors.