Apparently, Google plans to cut ties with Scale AI because Meta is investing billions of dollars in the data-labeling startup. Other AI companies are also planning to distance themselves from the American startup.
That’s what numerous sources that are familiar with the matter have told Reuters.
Google was planning to devote $200 million this year to Scale AI for the human-labeled training data crucial for developing technology, including the large language models (LLMs) that power Google Gemini.
Then came the news that Meta is in advanced talks to invest billions in Scale AI.
According to one of the sources Reuters spoke with, Mark Zuckerberg’s company is willing to invest $14.8 billion in the data-labeling company. This gives the company a 49% minority nonvoting stake in Scale AI.
Meta’s willingness to spend billions of dollars on Scale AI has not only spooked Google. Other tech companies, including Microsoft, OpenAI, and Elon Musk’s xAI, are also backing away.
The reason why these companies are no longer interested in investing in Scale AI is simple: they are afraid that doing business with the data-labeling startup will expose their research priorities and road map to a rival.
“By contracting with Scale AI, customers often share proprietary data as well as prototype products for which Scale’s workers are providing data-labeling services. With Meta now taking a 49% stake, AI companies are concerned that one of their chief rivals could gain knowledge about their business strategy and technical blueprints,” Reuters writes.
OpenAI’s CFO, Sarah Friar, said on Friday that the company will continue to work with Scale AI. Scale AI’s CEO Alexandr Wang, along with a handful of employees, will move over to Meta.
Meta has pledged to invest $65 billion in enlarging its AI infrastructure in the United States this year.
“In 2025, I expect Meta AI will be the leading assistant serving more than 1 billion people, Llama 4 will become the leading state-of-the-art model, and we’ll build an AI engineer that will start contributing increasing amounts of code to our R&D efforts,” Zuckerberg said.
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