Meta Buys 49 Percent Stake in Scale AI for $14.3 Billion

Meta Platforms Inc. has finalized a $14.3 billion acquisition of a 49% stake in Scale AI, marking one of its largest investments to date and signaling an intensified strategic focus on artificial intelligence infrastructure. The transaction, which values Scale AI at over $29 billion, makes it Meta’s second-largest deal following the $19 billion acquisition of WhatsApp in 2014.

The agreement significantly deepens the commercial relationship between Meta and Scale, a San Francisco-based data-labeling and AI infrastructure startup. In addition to the financial investment, Scale’s founder and CEO Alexandr Wang will join Meta to play a key role in its AI strategy, while remaining on Scale’s board of directors. Jason Droege, formerly Scale’s Chief Strategy Officer, has been appointed as interim CEO to lead the company through this transitional phase.

Scale AI, founded in 2016, has become a critical player in the development of artificial intelligence systems by providing high-quality annotated datasets required for training machine learning models. Its data services are used by leading AI labs and major technology firms, including OpenAI, Microsoft, Amazon, Anthropic, and Meta itself. The company’s value proposition lies in its ability to deliver accurately labeled data at scale, which is essential for building and refining AI models, including large language models (LLMs).

The new partnership follows a $1 billion funding round in May 2024 that valued Scale at approximately $14 billion. That round attracted backing from major technology companies, including Nvidia, Amazon, and Meta. The latest Meta investment more than doubles that valuation, underscoring the increasing strategic importance of data infrastructure in the rapidly evolving AI landscape.

The deal allows Meta to secure a near-majority interest in Scale while preserving the startup’s independent operational structure. Meta’s decision to invest in Scale instead of pursuing a full acquisition appears to be part of a broader industry trend where large technology firms secure talent and technological assets from startups without triggering full-scale takeovers. Similar examples include Microsoft’s recruitment of key personnel from Inflection AI and Amazon’s partnership with Adept AI.

Alexandr Wang’s transition from Scale to Meta is a significant component of the deal. At just 28 years old, Wang has grown Scale into a foundational player in the AI value chain. His leadership has enabled Scale to expand its services across various applications of AI, including autonomous vehicles, generative AI, and enterprise-level data annotation. Despite lacking a traditional research background, Wang’s business acumen has drawn comparisons to prominent figures in the AI ecosystem who focus on operational scale and strategic direction over purely academic contributions.

Wang’s move to Meta comes amid CEO Mark Zuckerberg’s renewed emphasis on “superintelligence,” a concept closely related to artificial general intelligence (AGI). This pivot represents a continuation of Zuckerberg’s pattern of aggressively shifting Meta’s strategic direction in response to emerging technological trends. Following its major bet on the metaverse in 2021, Meta has now turned its attention to AI, seeking to catch up with or surpass competitors such as Google, OpenAI, and Microsoft.

By bringing Wang and a small group of Scale employees into Meta, the company gains both talent and insight into the data needs and priorities of its competitors. Scale’s broad client base includes many of the very companies Meta seeks to challenge in the race for AI leadership. This dual role—as both a strategic partner to Meta and an independent provider of data services to other AI developers—places Scale in a uniquely influential position within the industry.

Scale’s core operations involve managing platforms such as Remotasks and Outlier, which coordinate thousands of gig workers globally to manually label data. These operations have enabled the company to provide tailored, high-quality datasets that are used in the development of AI systems across a wide range of industries. The firm initially gained traction by supporting autonomous vehicle companies like General Motors and Toyota and has since expanded into servicing LLM developers and enterprise AI solutions.

The implications of Meta’s investment extend beyond the immediate financial and talent acquisition benefits. The partnership strengthens Meta’s internal AI capabilities at a time when access to high-quality data is becoming a decisive competitive advantage. With regulatory scrutiny intensifying around AI safety, privacy, and ethical use, the ability to source and control data pipelines in a reliable and transparent manner will be a critical factor in long-term viability.

Meta’s 49% stake ensures significant influence over Scale’s future direction without direct control, allowing the startup to maintain business relationships with other major tech players. However, this arrangement could raise questions among existing Scale clients about the confidentiality and neutrality of its services, particularly given the competitive nature of the AI industry.

The leadership transition at Scale also suggests a potential shift in corporate focus. Interim CEO Jason Droege brings extensive experience from previous roles at Uber Eats and Axon, where he helped scale operations and transition businesses toward more software-centric models. His appointment may signal Scale’s intent to further commercialize its offerings and broaden its reach across enterprise markets.

Advisors for the deal include Centerview Partners LLC as financial advisor and Wilson Sonsini Goodrich & Rosati as legal counsel for Scale. Strategic communications support was provided by Joele Frank.