AI Daily: Meta invests in Scale AI, valuing startup at $29B
Confident Investing Starts Here:
SCALE AI: Scale AI stated that, 'Scale AI announced a significant new investment from Meta Platforms (META) that values Scale at over $29 billion. The agreement will also substantially expand Scale and Meta's commercial relationship to accelerate deployment of Scale's data solutions. In addition, Scale's founder, Alexandr Wang, is joining Meta to work on Meta's AI efforts. Wang will continue to serve as a director on the Scale Board of Directors and support Scale's ongoing work to unlock the power of AI and keep human values at the forefront. Scale will utilize the proceeds of the deal to accelerate innovation and strengthen strategic partnerships with customers.
'In addition, Scale will distribute proceeds from Meta's investment to Scale shareholders and vested equity holders, providing them with substantial liquidity as well as the opportunity to continue participating in Scale's success as ongoing equity holders of the Company. Following its investment, Meta will hold a minority of Scale's outstanding equity.'
INVESTING IN XAI: Two dozen venture capital firms and other investors are buying about $250M worth of shares in xAI, according to internal documents seen by The New York Times ' Ryan Mac and Kate Conger. Current and former employees of xAI could sell a portion of their shares to investors including TPG (TPG), ARK Invest and Sequoia Capital under a tender offer, which values xAI at $113B, the report stated. The tender offer is separate from other talks held by xAI, in which investors have discussed putting as much as $20B into the company at a valuation of up to $120B, the Times noted.
xAI developed the chatbot Grok, which competes with Microsoft-backed (MSFT) OpenAI's ChatGPT and other AI offerings from Microsoft, Amazon (AMZN), Meta Platforms (META) and Alphabet (GOOGL). Elon Musk, who earlier this year merged xAI with X, the company formerly known as Twitter, is also the CEO of Tesla (TSLA).
NEXT-BEST AI VENDOR: After having attended the Advancing AI Event in San Jose where AMD (AMD) provided an update to its end-to-end AI infrastructure platform, BofA analyst Vivek Arya said 'investor expectations might have been high,' but it highlights the company's continued execution in its AI roadmap, customer and ecosystem proliferation, and software maturity. AMD also doubled down on its partnerships with Meta (META), Oracle (ORCL) and Microsoft (MSFT), as well as xAI, OpenAI, and Saudi Arabia's Humain, though no new hyperscaler customer was officially announced, says the analyst, who thinks 'there may be an engagement' with Amazon's (AMZN) AWS given it was a key sponsor for the event, but adds that AWS often likes to announce its new instances and engagements at its own events. The firm, which sees AMD establishing itself as 'the next-best AI vendor,' maintains a Buy rating and $130 price target on the shares.
AI CHIPS: Cloud computing startup Crusoe CEO Chase Lochmiller said the company plans to purchase roughly $400M worth of AI chips from Advanced Micro Devices (AMD) to add to its portfolio of computing power, reported Reuters ' Max Cherney. Crusoe is aiming to build a data center to house the AMD AI chips in the U.S. and will rent them to customers for building AI models and running applications, notes the report, which adds that the artificial intelligence data center builder plans to purchase roughly 13,000 MI355X chips and use a liquid cooling system.
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