Early investors await Meta-Scale deal windfall: Report
NYT News Service Alexandr Wang, cofounder, Scale AI
Meta is planning to invest $15 billion in Scale AI, beefing up its artificial intelligence (AI) talent pool and ensuring hefty returns for some early investors in both companies, according to The Information.
Investors set to gain from the deal include Peter Thiel's Founders Fund, Chase Coleman's Tiger Global and venture capital firm Accel.
While the deal is yet to be finalised, Meta is expected to pay between $14 and $15 a share. Some of the earliest investors in Scale AI paid 1 to 3 cents per share, including angel investor Paige Craig's Outlander VC, Y Combinator, angel investors Brockman and Nat Friedman, according to its corporate Delaware charter.Accel is the largest outside investor in Scale with a 20% stake, The Information reported, citing people in the know. It is looking at a $2 billion to $3 billion windfall from the Meta deal against an unknown amount of investment.Tiger Global is another likely winner, with its $200 million investment turning into $1 billion.
Notably, both Accel and Tiger Global had reaped substantial returns from their investments in Facebook.
Index Ventures, Greenoaks, Coatue Management, Spark Capital, Dragoneer Investment Group and Thrive Capital are also among venture capital firms that can expect to gain big from the deal. Other potential big winners include early angel investors such as Outlander VC and current OpenAI president Greg Brockman, The Information reported.Meta would acquire a 49% stake in Scale, which would then use most of the funds from the sale to pay a dividend to its shareholders, including current and former employees as well as venture capital investors.Once finalised, this would be the biggest external AI investment by Meta. Existing Scale shareholders would keep their shares, while Meta would heavily dilute their ownership percentage.
Meta beefs up AI talent pool
Scale's chief executive officer Alexandr Wang and other employees join Meta's workforce if the multibillion-dollar deal comes through. The startup, which counts OpenAI and Google among its clients, is expected to name chief strategy officer Jason Droege as its new CEO. Scale labels the data that tech firms, such as Meta Platforms Inc. and OpenAI, use to train and improve their AI models, and helps companies make custom AI applications. It has been enlisting PhDs, nurses and other experts with advanced degrees to help develop more sophisticated models, Bloomberg reported.
Meanwhile, Mark Zuckerberg is personally picking researchers for a 50-strong 'superintelligence' team that will work on artificial general intelligence (AGI). Meta has been poaching top talent from more successful artificial intelligence (AI) rivals OpenAI and Google, according to reports. The latest fillip to shore up its AI research bench strength partly arises from the frustration over tepid performance and reception of Meta's Llama 4 large language model (LLM).
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