Google Cuts Ties with Scale AI Amid Meta Investment
Google is ending its partnership with Scale AI. Scale AI is a leading AI data-labeling startup. This comes after Meta’s $29 billion investment in the company. Five sources familiar with the matter revealed that Google plans to shift its $200 million workload to rival companies.
Meta’s 49% stake in Scale AI has raised concerns among tech giants. Google and Microsoft worry about potential data exposure to a competitor. Companies are worried that working with Scale AI could reveal their research priorities and roadmaps to Meta.
Scale AI generates most of its revenue from generative AI model makers. These makers pay for access to human trainers with specialized knowledge. However, major clients like Google and Microsoft are backing away due to Meta’s involvement. Elon Musk’s xAI is also looking to exit, while OpenAI has reduced its partnership.
The split could benefit Scale AI’s competitors, including Turing, Labelbox, and Handshake, who are seeing increased demand for their services. Some AI labs are now considering hiring in-house data-labelers to keep their data secure.
The Meta deal values Scale AI at $29 billion, more than double its previous valuation of $14 billion. Scale AI’s CEO will join Meta to lead AI efforts, as part of the agreement.