Meta in talks for Scale AI investment that could top $10 billion
Meta Platforms is in talks to make a multibillion-dollar investment into artificial intelligence startup Scale AI, according to people familiar with the matter.
The financing could exceed $10 billion in value, some of the people said, making it one of the largest private company funding events of all time.
The terms of the deal are not finalized and could still change, according to the people, who asked not to be identified discussing private information.
A representative for Scale did not immediately respond to requests for comment. Meta declined to comment.
Scale AI, whose customers include Microsoft and OpenAI, provides data labeling services to help companies train machine-learning models and has become a key beneficiary of the generative AI boom. The startup was last valued at about $14 billion in 2024, in a funding round that included backing from Meta and Microsoft. Earlier this year, Bloomberg reported that Scale was in talks for a tender offer that would value it at $25 billion.
This would be Meta's biggest ever external AI investment, and a rare move for the company. The social media giant has before now mostly depended on its in-house research, plus a more open development strategy, to make improvements in its AI technology. Meanwhile, Big Tech peers have invested heavily: Microsoft has put more than $13 billion into OpenAI while both Amazon.com and Alphabet have put billions into rival Anthropic.
Part of those companies' investments have been through credits to use their computing power. Meta doesn't have a cloud business, and it's unclear what format Meta's investment will take.
Chief Executive Officer Mark Zuckerberg has made AI Meta's top priority, and said in January that the company would spend as much as $65 billion on related projects this year.
The company's push includes an effort to make Llama the industry standard worldwide. Meta's AI chatbot — already available on Facebook, Instagram and WhatsApp — is used by 1 billion people per month.
Scale, co-founded in 2016 by CEO Alexandr Wang, has been growing quickly: The startup generated revenue of $870 million last year and expects sales to more than double to $2 billion in 2025, Bloomberg previously reported.
Scale plays a key role in making AI data available for companies. Because AI is only as good as the data that goes into it, Scale uses scads of contract workers to tidy up and tag images, text and other data that can then be used for AI training.
Scale and Meta share an interest in defense tech. Last week, Meta announced a new partnership with defense contractor Anduril Industries to develop products for the U.S. military, including an AI-powered helmet with virtual and augmented reality features. Meta has also granted approval for U.S. government agencies and defense contractors to use its AI models.
The company is already partnering with Scale on a program called Defense Llama — a version of Meta's Llama large language model intended for military use.
Scale has increasingly been working with the U.S. government to develop AI for defense purposes. Earlier this year the startup said it won a contract with the Defense Department to work on AI agent technology. The company called the contract "a significant milestone in military advancement.'
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Japan Times
8 hours ago
- Japan Times
Trump says Musk relationship over, warns of 'serious consequences' if he funds Democrats
Donald Trump said on Saturday his relationship with his billionaire donor Elon Musk is over and warned there would be "serious consequences" if Musk funds U.S. Democrats running against Republicans who vote for the president's sweeping tax and spending bill. In a telephone interview with NBC News, Trump declined to say what those consequences would be, and went on to add that he had not had discussions about whether to investigate Musk. Asked if he thought his relationship with the Tesla and SpaceX CEO was over, Trump said, "I would assume so, yeah." "No," Trump told NBC when asked if he had any desire to repair his relationship with Musk. "I have no intention of speaking to him," Trump said. However, Trump said he had not thought about terminating U.S. government contracts with Musk's StarLink satellite internet or SpaceX rocket launch companies. Musk and Trump began exchanging insults this week, as Musk denounced Trump's bill as a "disgusting abomination." Musk's opposition to the measure complicated efforts to pass the legislation in Congress, where Republicans hold only slim majorities in the House of Representatives and Senate. The bill narrowly passed the House last month and is now before the Senate, where Trump's fellow Republicans are considering making changes. Nonpartisan analysts estimate the measure would add $2.4 trillion to the $36.2 trillion U.S. debt over 10 years, which worries many lawmakers, including some Republicans who are fiscal hawks. Musk also declared it was time for a new political party in the United States "to represent the 80% in the middle!" Trump said on Saturday he is confident the bill would get passed by the U.S. July 4 Independence Day holiday. "In fact, yeah, people that were, were going to vote for it are now enthusiastically going to vote for it, and we expect it to pass," Trump told NBC. Republicans have strongly backed Trump's initiatives since he began his second term as president on January 20. While some Republican lawmakers have made comments to the news media expressing concern about some of Trump's choices, they have yet to vote down any of his policies or nominations. Musk has deleted some social media posts critical of Trump, including one that signaled support for impeaching the president, appearing to seek a de-escalation of their public feud, which exploded on Thursday. During his first term as president, the House, then controlled by Democrats, twice voted to impeach Trump but the Senate both times acquitted him. The White House and Musk did not immediately respond to requests for comment on Saturday on the deleted posts. People who have spoken to Musk said his anger has begun to recede and they thought he would want to repair his relationship with Trump. One of the X posts that Musk appeared to have deleted was a response to another user posting: "President vs Elon. Who wins? My money's on Elon. Trump should be impeached and (Vice President) JD Vance should replace him." Musk had written "yes." On Theo Von's "This Past Weekend" podcast — recorded on Thursday as the feud between Trump and Musk unfolded and released on Saturday — Vance called Musk's criticism of Trump a "huge mistake." "I'm always going to be loyal to the president, and I hope that eventually Elon kind of comes back into the fold. Maybe that's not possible now because he's gone so nuclear. But I hope it is," said Vance, describing Musk as an "incredible entrepreneur." Trump is due to attend an Ultimate Fighting Championship fight card on Saturday in New Jersey. Since his second election win, he has attended two previous UFC mixed martial arts fight cards with Musk. Musk is not expected to attend on Saturday. Musk, the world's richest man, bankrolled a large part of Trump's 2024 presidential campaign, spending nearly $300 million in last year's U.S. elections and taking credit for Republicans retaining a majority of seats in the House and retaking a majority in the Senate. Trump named Musk to head an effort to downsize the federal workforce and slash spending, lauding him at the White House only about a week ago for his work as head of the Department of Government Efficiency. Musk cut only about half of 1% of total spending, far short of his brash plans to axe $2 trillion from the federal budget.
Japan Times
8 hours ago
- Japan Times
Meta in talks for Scale AI investment that could top $10 billion
Meta Platforms is in talks to make a multibillion-dollar investment into artificial intelligence startup Scale AI, according to people familiar with the matter. The financing could exceed $10 billion in value, some of the people said, making it one of the largest private company funding events of all time. The terms of the deal are not finalized and could still change, according to the people, who asked not to be identified discussing private information. A representative for Scale did not immediately respond to requests for comment. Meta declined to comment. Scale AI, whose customers include Microsoft and OpenAI, provides data labeling services to help companies train machine-learning models and has become a key beneficiary of the generative AI boom. The startup was last valued at about $14 billion in 2024, in a funding round that included backing from Meta and Microsoft. Earlier this year, Bloomberg reported that Scale was in talks for a tender offer that would value it at $25 billion. This would be Meta's biggest ever external AI investment, and a rare move for the company. The social media giant has before now mostly depended on its in-house research, plus a more open development strategy, to make improvements in its AI technology. Meanwhile, Big Tech peers have invested heavily: Microsoft has put more than $13 billion into OpenAI while both and Alphabet have put billions into rival Anthropic. Part of those companies' investments have been through credits to use their computing power. Meta doesn't have a cloud business, and it's unclear what format Meta's investment will take. Chief Executive Officer Mark Zuckerberg has made AI Meta's top priority, and said in January that the company would spend as much as $65 billion on related projects this year. The company's push includes an effort to make Llama the industry standard worldwide. Meta's AI chatbot — already available on Facebook, Instagram and WhatsApp — is used by 1 billion people per month. Scale, co-founded in 2016 by CEO Alexandr Wang, has been growing quickly: The startup generated revenue of $870 million last year and expects sales to more than double to $2 billion in 2025, Bloomberg previously reported. Scale plays a key role in making AI data available for companies. Because AI is only as good as the data that goes into it, Scale uses scads of contract workers to tidy up and tag images, text and other data that can then be used for AI training. Scale and Meta share an interest in defense tech. Last week, Meta announced a new partnership with defense contractor Anduril Industries to develop products for the U.S. military, including an AI-powered helmet with virtual and augmented reality features. Meta has also granted approval for U.S. government agencies and defense contractors to use its AI models. The company is already partnering with Scale on a program called Defense Llama — a version of Meta's Llama large language model intended for military use. Scale has increasingly been working with the U.S. government to develop AI for defense purposes. Earlier this year the startup said it won a contract with the Defense Department to work on AI agent technology. The company called the contract "a significant milestone in military advancement.'
Japan Times
12 hours ago
- Japan Times
Taiwan's Yageo plans to keep Shibaura's AI technology in Japan
Taiwan's Yageo said it would keep Shibaura Electronics's most advanced technology in Japan if it successfully acquires the artificial intelligence sensor maker. The comments from Yageo founder and Chairman Pierre Chen come as Tokyo seeks to strike a balance between shareholder returns while ensuring cutting-edge AI technology stays at home. Shibaura's high-precision thermistors are key for monitoring the internal temperature of electronic devices to prevent overheating. That's especially important in AI, where data centers with large clusters of high-performance servers churn through troves of data. "It is not in Yageo's interest to see Shibaura's technology transfer to countries that Japan considers to be unfriendly,' Chen told reporters in Taipei on Saturday. "We will impose even stricter controls on the technology to make sure it doesn't get leaked.' Yageo is facing off against Nintendo supplier Minebea Mitsumi in its bid for Shibaura and is offering ¥6,200 for each Shibaura share. Minebea last offered ¥5,500 a share. Yageo's tender offer period ends June 19, though Chen wouldn't say if the company would consider an extension. Chen said Yageo officials will meet Shibaura management in Tokyo during the week of June 16 to discuss the offer. The Taiwanese company has had good communications with Japan's powerful Ministry of Economy, Trade and Industry, according to Chen. A Shibaura official declined to comment. Calls to METI outside business hours went unanswered. Yageo's bid for Shibaura has triggered a backlash in some Japanese business circles resistant to takeover bids from foreign companies. Tokyo officials are also split on such overtures. Regulators are trying to bolster corporate transparency and shareholder returns by encouraging companies to unwind cross shareholdings. But that — and a cheap yen — is also making it easier to initiate takeovers of Japanese companies.
