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Meta talking to Scale AI for $10bn investment: Is AI's largest private funding deal coming soon?
Meta's potential investment would be its largest external AI outlay so far. Unlike its peers, the tech giant has largely relied on internal research and open-source AI development read more
Meta is looking to move ad content creation to fully be outsourced to AI. Image Credit: Reuters
Meta Platforms Inc. is in discussions to invest more than $10 billion in artificial intelligence startup Scale AI, in what could become one of the largest private funding deals to date.
The terms of the agreement are not finalised and could still change, Bloomberg cited people aware of the development as saying.
Scale AI valued at $25bn in tender talks
Founded in 2016 by CEO Alexandr Wang, Scale AI provides data-labelling services critical to training machine-learning models. The company, which counts Microsoft and OpenAI among its clients, was last valued at about $14 billion in 2024. Bloomberg previously reported Scale was in discussions for a tender offer that could raise its valuation to $25 billion.
Scale reported $870 million in revenue last year and is projecting $2 billion in sales for 2025, according to Bloomberg. The startup plays a central role in the generative AI boom, employing large numbers of contract workers to tag and clean up images, text, and other data used in model training.
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Meta switches up strategy
Meta's potential investment would be its largest external AI outlay so far. Unlike its peers– Microsoft, Amazon, and Alphabet– which have spent billions on AI firms like OpenAI and Anthropic, Meta has largely relied on internal research and open-source AI development.
Meta CEO Mark Zuckerberg said in January the company would spend up to $65 billion this year on AI-related projects. Its strategy includes advancing its Llama language model and expanding its AI assistant, which is now embedded in Facebook, Instagram, and WhatsApp and used by roughly 1 billion people monthly.
Though the structure of the investment remains unclear, it could mark a departure from the industry norm of cloud-compute credits, as Meta does not operate a cloud platform.
AI for defence: A growing shared interest
Both Meta and Scale AI have deepening ties to the US defense sector. Meta recently partnered with Anduril Industries to develop AI-powered military products, including an augmented reality helmet. It has also authorised the use of its AI models by government agencies and defense contractors.
Meta and Scale are collaborating on Defense Llama, a version of Meta's language model tailored for military use. Earlier this year, Scale won a Department of Defense contract to work on AI agent technology, which the company called a major step forward in defense innovation.
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