Meta Platforms Inc. is reportedly in discussions for a significant investment in artificial intelligence startup Scale AI that could exceed $10 billion, according to individuals familiar with the matter. The potential deal, if finalized, would mark Meta’s largest external AI investment to date and would be a substantial funding event for a private company.
However, sources indicate that the terms of the potential investment are not yet finalized and remain subject to change. Representatives for Meta declined to comment on the matter, while Scale AI has not yet responded to requests for comment.
Scale AI, co-founded in 2016 by CEO Alexandr Wang, specializes in providing data labeling and organization services essential for training machine-learning models. The company has benefited significantly from the generative AI boom, serving customers that include major tech players like Microsoft Corp. and OpenAI.
Scale AI was most recently valued at approximately $14 billion in 2024, a funding round that saw participation from both Meta and Microsoft. Earlier this year, reports suggested Scale AI was in talks for a tender offer that could have valued the company at $25 billion.
This potential investment represents a notable departure for Meta, which has historically relied primarily on its extensive in-house research and an open development strategy for advancing its AI technology. In contrast, other major tech companies such as Microsoft, Amazon, and Alphabet have made substantial investments in AI firms like OpenAI and Anthropic.
Some of these investments by Meta’s peers have involved providing credits for the use of their cloud computing infrastructure. As Meta does not operate a cloud business, the specific form of its potential investment in Scale AI remains unclear.
Meta CEO Mark Zuckerberg has publicly positioned AI as the company’s top strategic priority, announcing in January that Meta plans to allocate up to $65 billion this year towards AI-related projects. A significant part of this push involves establishing Meta’s AI model, Llama, as a leading industry standard. The Meta AI chatbot, integrated across its platforms, currently serves 1 billion users monthly.
Financially, Scale AI reported robust growth, generating $870 million in revenue last year. Projections suggest sales could more than double to $2 billion in 2025. The company’s operational model relies heavily on contract workers to process and prepare vast amounts of data for AI training.
Both Meta and Scale AI also share an interest in defense technology applications of AI. Last week, Meta announced a collaboration with defense contractor Anduril Industries Inc. to develop products for the U.S. military. Meta has also approved U.S. government agencies and defense contractors to utilize its AI models.
The two companies are already collaborating on “Defense Llama,” a specialized version of Meta’s Llama large language model tailored for military use. Scale AI has increasingly engaged with the U.S. government on defense AI initiatives, including securing a contract with the Department of Defense earlier this year to develop AI agent technology, a contract the company described as “a significant milestone in military advancement.”
