Meta Could Spend Majority Of AI Budget On Scale As Part Of $14 Billion Deal

Forbes

15 hours ago

Alexandr Wang will step down as Scale AI to join Meta and lead a new AI lab.
Last night, Scale AI announced that Meta would acquire a 49 percent stake in it for $14.3 billion — a seismic move to support Meta's sprawling AI agenda.
But there's more to ​​the agreement for Scale than a major cash infusion and partnership. Forbes has learned that Meta intends to pay Scale at least $450 million a year for five years for its AI products, or more than half of its annual AI spend, whichever is less, according to a person who worked on the deal.
Scale AI declined to comment. Meta didn't respond to a comment request.
That commitment from Meta would make up a major part of Scale's revenue. Last year, Scale generated $870 million in revenue, largely driven by demand for its data labelling services. This year, the company expected to generate $2 billion in revenue, Bloomberg previously reported.
But on Thursday, Forbes first reported Thursday that OpenAI, which still has contracts with Scale, had been winding down its spend on the company's services in recent months as it searched for new partners better suited to its needs (Scale denied the claim). The agreement with Meta could help Scale fill a potential revenue hole should OpenAI or customers like Anthropic and Microsoft consider revising their contracts with the company or allowing them to expire now that it had such close ties with a major competitor.
Alexandr Wang, Scale's cofounder and CEO, and one of the world's youngest billionaires at age 28, is set to join Meta to lead its AI lab, where he will lead an effort to develop a so-called superintelligence, an AI system that outperforms human capabilities.
The Meta deal is a major and unexpected turning point for Scale, which Wang has led since its founding in 2016. During his tenure, Scale built an army of clickworkers to train AI data models, which proved an essential tool for AI giants building LLMs and other applications. More recently, Wang led Scale's foray into national security, landing a series of contracts with the Pentagon to help the military implement AI models and use the technology for training and planning.
Now, under new CEO Jason Droege, who launched Uber Eats, and previously was an executive at law enforcement technology company Axon, Scale — which some had hoped might be a 2025 IPO candidate — has tethered its future and founder to Meta's AI ambitions.