Meta's Scale AI deal to cost latter big clients, including Google and Microsoft
Several clients of artificial intelligence (AI) startup
Scale AI
, including its biggest client,
Google
, are planning to end their relationship with the company after
Meta
acquired a 49% stake, according to Reuters.
The deal, which values the data-labelling startup at $29 billion, has sparked concerns among other major customers as well, including
Microsoft
, ChatGPT-maker
OpenAI
, and Elon Musk's AI startup, xAI.
Why are tech firms worried?
by Taboola
by Taboola
Sponsored Links
Sponsored Links
Promoted Links
Promoted Links
You May Like
Top 5 Dividend Stocks for May 2025
Seeking Alpha
Read Now
Undo
Scale AI provides data services to many AI labs. With Meta now a significant investor, it could gain an inside view of its rivals' data strategies — a key ingredient in training powerful AI models.
This has raised alarms among companies competing with Meta, as they fear that continuing to work with Scale might expose sensitive data and give Meta a competitive edge.
Live Events
Google had planned to pay Scale AI around $200 million this year for human-labelled data, which is crucial to train AI models such as those used in its Gemini system. However, it is now shifting much of that work away from Scale.
Discover the stories of your interest
Blockchain
5 Stories
Cyber-safety
7 Stories
Fintech
9 Stories
E-comm
9 Stories
ML
8 Stories
Edtech
6 Stories
OpenAI also scaled back its use of the company months ago, according to Reuters, though it had spent far less than Google. Still, OpenAI's CFO, Sarah Friar, said that the company will continue to work with Scale AI as one of many suppliers.
"We don't want to ice the ecosystem because acquisitions are going to happen," she said. "And if we ice each other out, I think we're actually going to slow the pace of innovation."
Despite these concerns, a Scale AI spokesperson said the company's business remains strong and that it is committed to keeping customer data secure.
Meta–Scale AI deal
Meta's investment of $14.3 billion in Scale AI boosts the startup's valuation to over $29 billion, up from $14 billion before the deal.
This deal is considered an 'acquihire', to bring on board employees from the acquired company. Scale's CEO, Alexandr Wang, will move to Meta to lead its efforts in building 'superintelligence', while chief strategy officer Jason Droege will take over as interim CEO.
Despite the optimism shown by Scale AI, losing major clients such as Google could deal a serious blow to Scale's business and long-term growth.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Mint
29 minutes ago
- Mint
WhatsApp for Android to get iOS-style document scanning feature soon: Report
WhatsApp is reportedly developing a new feature for Android users that will allow them to scan documents directly within the app, a capability that has been available to iOS users for several months. According to feature tracker WABetaInfo, the update was spotted in version 2.25.18.29 of the WhatsApp beta for Android, although it remains inactive as the feature is still under development. Notably, the forthcoming tool is expected to simplify document sharing by enabling users to scan physical documents through their smartphone's camera without switching to another app. When launched, the Scan Document option will appear alongside the existing 'Browse documents' and 'Choose from gallery' options in the attachment menu. Tapping on it will trigger the device's camera, offering the ability to manually or automatically capture pages. Once the pages have been scanned, WhatsApp will likely compile them into a PDF file, which users can send to their contacts, forward to themselves, or store on their device for later use, adds the report. This move is anticipated to benefit users who frequently share physical paperwork and want a more integrated experience within the messaging platform. For now, Android users can use the built-in document scanning feature found in the Google Drive app as an alternative until WhatsApp rolls out its native functionality. In addition to the document scanner, the Meta-owned instant messaging app is also trialling an artificial intelligence-based feature that summarises messages. Some users running beta version 2.25.18.18 or later have reported access to a new "Summarise with Meta AI" button, which appears in chats with a substantial number of unread messages. This feature aims to provide users with quick overviews of lengthy conversations using Meta's AI technology. Both features are expected to roll out gradually, first to beta testers, before eventually becoming available to all users on the stable Android release.
Economic Times
an hour ago
- Economic Times
'They copy-pasted from AI': Tech company offers Rs 20 lakh, can't find a single techie who understands code
You Might Also Like: AI cannot replace all jobs, says expert: 3 types of careers that could survive the automation era A technology firm recently launched a hiring campaign for a well-compensated entry-level position offering a handsome Rs 20 lakh per annum. However, despite conducting a staggering 450 interviews, the company failed to find a single candidate suitable for the role. The recruitment team turned to the Developers India subreddit to share their ordeal, hoping to shed light on the complexities of hiring in the AI company had posted job listings on LinkedIn for junior-level frontend and backend developers, as well as QA roles. The salary range—up to Rs 20 lakh—attracted a wave of over 12,000 applications. From the outset, the hiring team filtered out nearly 10,000 applicants, citing reasons such as poorly tailored resumes and a lack of relevant technical abilities. According to them, the early elimination was not about being overly selective but about saving both their own time and the applicants' from fruitless interview who did make it to the interviews were tested on fundamental programming principles as well as standard data structures and algorithms topics like trees, heaps, linked lists, and graph traversal methods such as breadth-first search and depth-first search. Interestingly, the firm even permitted the use of tools like ChatGPT during assessments to simulate a real-world working this modern approach backfired. While candidates were quick to churn out working solutions—often copied directly from AI—the problems began when interviewers asked for an explanation. Most were unable to describe what their own code was doing or provide details about its time and space complexity. This led to the realization that many candidates were simply copying and pasting without comprehending the logic behind the code—a phenomenon the recruiter described as "vibe coding."This troubling pattern prompted the company to reflect on its own methods. Was the interview process too rigid or flawed? Or was it indicative of a larger issue where aspiring developers rely too heavily on AI tools, skipping the foundational learning necessary to become competent programmers?The Reddit community didn't hold back in its response. Some users questioned the company's recruitment practices, pointing out that spending 450 hours on interviews without hiring a single person suggested deeper internal problems. One user criticized the process as inefficient and misguided, arguing that the HR team might be more at fault than the candidates themselves. Another suggested that if so many interviews yield zero hires, it could be a sign that the hiring strategy—and not the talent pool—is hiring saga mirrors a broader anxiety echoed by Godfather of AI, Geoffrey Hinton, who recently warned that roles relying heavily on intellectual replication—like coding without understanding—are among the first to be replaced by AI. As companies seek talent that can think, not just code, this recruitment roadblock may signal a growing divide between tool-dependent developers and genuinely skilled professionals.
&w=3840&q=100)
Business Standard
an hour ago
- Business Standard
With ads and paid subscriptions, is WhatsApp Meta's next big bet?
After the success of bringing businesses to WhatsApp, Meta — its parent — is now introducing ads and subscriptions to Status and Channels under the Updates tab of the messaging app, the company said on Monday. This move will further push its monetisation efforts on WhatsApp. The Updates tab is now used by 1.5 billion users every day. Users who follow certain Channels will be able to receive exclusive updates for a monthly fee. The Status tab will also begin featuring advertisements from businesses, enabling easier connection with users. This is the first time that businesses will be able to run advertisements directly on WhatsApp. Previously, there were only two ways to target users via WhatsApp: first, through paid messaging used by large businesses to send updates, and second, via ads on Facebook and Instagram that click through to open a WhatsApp chat. In a select media briefing, the company stated that for users who only use WhatsApp to chat with friends and family, there will be no change. To show ads in Status and Channels, the platform will share minimal information such as the user's country or city, language, and the Channels they follow. Alice Newton-Rex, Vice-President, Product at WhatsApp, said the platform will never share or sell users' phone numbers to advertisers. Personal messages, calls and group conversations will continue to be encrypted. 'We are increasingly seeing and hearing people wanting to use WhatsApp for more than just messaging close friends and family. That's part of the reason we introduced the 'Updates' tab as a place for optional experiences on WhatsApp like Channels and Status. Almost 1.5 billion people globally use Updates daily. It's often where people go when they are looking to discover something new,' said Newton-Rex. The new features will roll out gradually over the next few months. The timing of this launch is significant, as WhatsApp has seen its two existing advertisement models scale well — both paid messaging and click-to-WhatsApp ads are now billion-dollar businesses. This is especially relevant for a market like India, where WhatsApp has over 500 million users, and revenue from WhatsApp Business doubled in 2024. Sandhya Devanathan, Head of Meta India and South East Asia, previously told Business Standard that business momentum for WhatsApp in India is 'outpacing' several other countries. An important aspect of the rollout is the focus on preserving individual privacy. At a time when regulators worldwide are scrutinising big tech's use of personal data, WhatsApp maintains that it will share only minimal information with advertisers and that messages will remain encrypted. In response to a question about rising scams and frauds, and how ads on Updates would be safeguarded, Newton-Rex said all ads in Status would need to comply with Meta's advertising standards. 'We review every advertisement against our policies, and in addition, users can report or block businesses on WhatsApp or report individual ads,' she said.
