Can Scale AI and Alexandr Wang reignite Meta's AI efforts?

Yahoo

a day ago

Meta is reportedly investing nearly $15 billion dollars in the data labeling firm Scale AI and taking a 49% stake in the startup, while also bringing on CEO Alexandr Wang to help lead a new 'superintelligence' lab within the company.
The deal is reminiscent of Meta's previous large and risky bets, such as its $19 billion acquisition of WhatsApp and its $1 billion Instagram purchase. At the time those mergers closed, many people suggested Meta had grossly overpaid for the platforms — and today's discourse is no different. There's no shortage of investors and founders who were left scratching their heads this weekend over Meta's latest tie-up.
In the end, WhatsApp and Instagram became an integral part of CEO Mark Zuckerberg's empire. The question is whether the Scale AI deal will similarly work in Meta's favor, proving Zuckerberg's prescient strategy yet again, or whether the company is grasping at straws in a misguided effort to catch up to rivals like OpenAI, Google, and Anthropic.
In this case, Meta isn't betting on an emerging social media app, but on the data used to train top AI models. For the last several years, leading AI labs such as OpenAI have relied on Scale AI to produce and label data that's used to train models. In recent months, Scale AI and its data annotation competitors have started hiring highly skilled people, such as PhD scientists and senior software engineers, to generate high-quality data for frontier AI labs.
It may benefit Meta to have a close relationship with a data provider like Scale. Meta's leaders have complained about a lack of innovation around data in the company's leading AI teams, according to a person familiar with the matter.
Earlier this year, Meta's GenAI unit launched Llama 4, a family of AI models that failed to match the capabilities of Chinese AI lab DeepSeek's models, and which was broadly seen as a disappointment. Not helping matters, Meta is trying to combat an attrition problem. According to data compiled by SignalFire, Meta lost 4.3% of its top talent to AI labs in 2024.
Meta isn't just betting on Scale AI to reignite its AI efforts, but also on Wang to lead the aforementioned new superintelligence team. The 28-year-old CEO has proven himself to be a strong startup founder — he's known around Silicon Valley to be ambitious, a good salesman, and very well-connected. Over the past few months, Wang has been meeting with world leaders to discuss AI's impact on society.
Wang hasn't led an AI lab of this sort before, however, and he doesn't have the same AI research background that many other AI lab leaders do, like Safe Superintelligence's Ilya Sutskever or Mistral's Arthur Mensch. That's perhaps why Meta is also said to be recruiting high-profile talent like DeepMind's Jack Rae to round out its new AI research group.
The post-acquisition fate of Scale AI the company is a bit murky. The role of real-world data in AI model training is changing — some AI labs have brought data collection efforts in-house, while others have increased their reliance on synthetic (i.e. AI-generated) data. In April, The Information reported that Scale AI had missed some of its revenue targets.
According to Anyscale co-founder Robert Nishihara, several frontier AI labs are exploring novel ways to leverage and optimize data, many of which are quite compute-intensive.
'Data is a moving target,' Nishihara told TechCrunch in an interview. 'It's not just a finite effort to catch up — you have to innovate.'
It's possible that Meta and Wang's relationship could scare off other AI labs that have traditionally worked with Scale AI. If so, this deal could be a boon for Scale AI's competitors, such as Turing, Surge AI, and even nonconventional data providers such as the recently launched LM Arena.
Turing CEO Jonathan Siddharth told TechCrunch via email that he's received increased interest from customers in light of the rumors around Meta's deal with Scale AI.
'I think there will be some clients who will prefer to work with a partner that's more neutral,' he said.
Only time will tell how Meta's investment will pan out for its AI efforts, but the company has significant ground to make up. Meanwhile, the competition isn't slowing down. OpenAI is gearing up for the release of its next flagship model, GPT-5, as well as its first openly available model in years — a model that'll compete with Meta's current and future Llama releases.