In what could mark a significant evolution in its artificial intelligence strategy, Meta Platforms Inc. is reportedly close to finalizing an investment exceeding $10 billion in Scale AI, a rapidly expanding startup at the forefront of data annotation for machine learning. If confirmed, this would represent Meta’s most substantial external AI investment to date and rank among the largest private funding rounds in tech history, according to Bloomberg.
Founded in 2016 by Alexandr Wang, Scale AI has emerged as a vital player in the generative AI landscape. The company specializes in data labeling—a fundamental process for training accurate and effective machine learning models. Scale’s technology enables the structuring, tagging, and cleaning of datasets, a function critical to AI performance.
Scale’s client list includes major players such as Microsoft and OpenAI, positioning the startup as a key infrastructure provider in the sector. In 2024, it achieved a valuation of $14 billion in a funding round that included support from both Meta and Microsoft. According to Bloomberg, the company is now considering a tender offer that would value it at $25 billion, fueled by impressive revenue growth from $870 million in 2024 to a projected $2 billion in 2025.
While neither Meta nor Scale AI has issued public statements regarding the reported negotiations, sources indicate that terms are still under discussion and may change. However, the potential investment signals a notable departure from Meta’s long-standing practice of prioritizing internal development of AI tools.
What to Know:
Meta has historically focused on developing AI technologies in-house, supported by open-source projects such as its Llama large language model (LLM). Unlike competitors—Microsoft with OpenAI, Amazon with Anthropic, and Alphabet with multiple AI ventures—Meta has largely avoided large-scale external investments in AI startups.
- That approach may be shifting. In January, CEO Mark Zuckerberg emphasized the company’s renewed focus on artificial intelligence, stating it would become Meta’s highest priority. He outlined plans to allocate up to $65 billion toward AI initiatives in 2025. At the center of this effort is Llama, which now powers Meta’s AI-driven chatbot across Facebook, Instagram, and WhatsApp, reaching more than 1 billion users each month.
- The company’s growing interest in defense applications of AI may also be influencing this investment. Meta and Scale are currently working together on Defense Llama, a custom version of Meta’s LLM optimized for military purposes.
- Further signaling its interest in defense, Meta recently entered a partnership with Anduril Industries to co-develop AI-powered augmented and virtual reality helmets for the U.S. military. Additionally, Meta has authorized the use of its AI models by U.S. government agencies and defense contractors—an uncommon move among large tech firms.
On the other hand, Scale AI has been expanding its presence in the federal sector. Earlier this year, the startup secured a contract from the U.S. Department of Defense to develop AI agent technologies. The company described the deal as a “significant milestone in military advancement.”
As competition intensifies in the global AI arena, Meta’s potential investment in Scale could reflect not just an effort to stay competitive with rivals, but a strategic repositioning aimed at reinforcing its leadership in both commercial and national security AI applications.
