Meta Poised for $10 Billion Bet on Scale AI as Part of Bold AI Expansion Strategy

Meta Platforms is deep in discussions to invest over $10 billion into the AI startup Scale AI, signaling a potential shift in Meta's AI strategy, which has traditionally focused on internal development efforts. This investment marks Meta's largest external AI investment to date, reflecting its aggressive push into the AI sector.

Founded by CEO Alexandr Wang in 2016, Scale AI specializes in data labeling services, a crucial component in training machine learning models. The company provides high-quality data that serves as the "fuel" for generative AI applications, benefiting from the AI boom. Scale AI's clientele includes industry giants such as Microsoft and OpenAI, highlighting its pivotal role in the field.

Scale AI has experienced significant growth, with revenue reaching $870 million in 2024 and projections indicating it will double to $2 billion by 2025. Its valuation in a recent 2024 funding round was approximately $14 billion, with discussions underway for a potential acquisition valuing it at up to $25 billion.

If finalized, this transaction would be a landmark in private company financing, showcasing the increasingly competitive AI landscape. Such a move would align Meta with peers like Microsoft, Amazon, and Alphabet, who have invested billions into AI startups to secure their positions in the industry.

Meta's CEO, Mark Zuckerberg, has prioritized artificial intelligence in the company's strategic plans, announcing a commitment to spend up to $65 billion by 2025 on AI initiatives. Meta's ambitions include establishing its open-source language model, Llama, as the industry standard. The company's AI chatbot already serves over a billion active users across its platforms—Facebook, Instagram, and WhatsApp.

Additionally, there are collaborative efforts between Meta and Scale AI in defense technology, indicating an expanded scope of interest and potential application areas for these AI models. As part of this trajectory, Meta has partnered with Anduril Industries for developing AI-driven military tech, emphasizing the integration of virtual and augmented reality capabilities.