Meta Platforms (META) Stock: Company Explores $10 Billion Investment in Scale AI Startup

TLDR

Table of Contents

Meta is in talks to invest over $10 billion in AI startup Scale AI, potentially making it one of the largest private company funding events ever
Scale AI specializes in data labeling and annotation services for training AI models, serving customers like Meta, OpenAI, and Microsoft
The startup generated $870 million in revenue in 2024 and expects to reach $2 billion this year
Scale AI has evolved from basic image labeling to using PhDs and experts for complex AI model improvement through reinforcement learning
The deal would deepen Meta’s AI capabilities while Scale AI gains a powerful ally in its competition with other AI data providers

Meta Platforms is reportedly in advanced talks to make a multibillion-dollar investment in Scale AI, the artificial intelligence startup that has become a dominant force in the AI training data market. The potential deal could exceed $10 billion, making it one of the largest private company funding events in history.

🚨 BREAKING: Meta is reportedly in talks to invest over $10 Billion in AI startup Scale AI 🤖💰
If the deal goes through, it could become one of the largest private tech funding rounds ever 🚀
Meta’s move highlights the AI arms race heating up across Silicon Valley 🔥#Meta… pic.twitter.com/nslUBHQDjB
— FutureGenNews (@FutureGenNews) June 9, 2025

Scale AI, founded in 2016 by 28-year-old CEO Alexandr Wang, has positioned itself as a critical player in the AI ecosystem. The company uses an army of contractors to label and annotate data that tech giants like Meta and OpenAI use to train their AI models.

The startup’s business has evolved considerably since its early days. Initially focused on labeling images for self-driving car technology, Scale AI now handles the massive text datasets needed for large language models like ChatGPT. The company has become what Wang calls a dominant player in one of AI’s three pillars: data.

Scale AI’s financial trajectory reflects the broader AI boom. The company generated approximately $870 million in revenue in 2024. Industry projections suggest this figure could more than double to $2 billion in 2025.

The startup was valued at roughly $14 billion in its most recent funding round, which included backing from Meta. Bloomberg reports suggest the new financing could value Scale AI at around $25 billion.

Scale AI’s Workforce Evolution

The company has faced scrutiny over its reliance on overseas contractors in countries like Kenya and the Philippines. These workers, paid relatively modest wages, review and label vast amounts of online content. Some have reported psychological trauma from the material they encounter.

However, Scale AI’s approach has grown more sophisticated. The company now employs better-compensated experts with advanced degrees for complex AI improvement tasks. As of early 2025, 12% of contributors working on model improvement held PhDs in fields like molecular biology, while over 40% possessed master’s degrees, law degrees, or MBAs.

These experts create challenging problems for AI models to solve, particularly for medical and legal applications. One focus area involves training AI systems to answer complex tax law questions that vary by jurisdiction.

The demand for Scale AI’s expert network has increased following the emergence of DeepSeek, the Chinese AI model that challenged American AI dominance. Companies are investing more heavily in models that can perform human-level reasoning on complicated tasks.

Strategic Implications for Meta

For Meta, the Scale AI investment aligns with its aggressive AI spending plans. The social media giant has committed up to $65 billion for AI-related projects this year. Meta’s Llama AI models serve approximately 1 billion monthly users across Facebook, Instagram, and WhatsApp.

The partnership could help Meta compete more effectively with rivals like Google and OpenAI. It also strengthens Meta’s ties with the U.S. government, as Scale AI has deepened its defense contracts and Wang has cultivated relationships with lawmakers concerned about Chinese AI advancement.

Scale AI serves diverse customers including Microsoft, OpenAI, and the U.S. Department of Defense. The company’s government relationships have grown stronger, with former Scale executive Michael Kratsios now serving as one of President Trump’s top tech advisors.

Meta and Scale AI previously collaborated on the Defense Llama model for government use. Meta’s AI models are already being used by U.S. government agencies and defense contractors for military applications.

The potential investment would represent Meta’s largest external funding commitment to date. It comes as Meta pursues other major infrastructure deals, including a recent 20-year agreement with Constellation Energy to purchase green credits from nuclear plants starting in 2027.

Wall Street maintains a strong buy consensus on Meta stock, with 41 buy ratings, three holds, and one sell rating among analysts. The average price target of $697.55 suggests shares are trading near fair value. Meta stock has gained 19.3% year-to-date and closed at $697.71, up 1.91% in the most recent session.

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