Meta's Llama 4 model has underperformed its competitors on benchmarks.
Meta has invested $15 billion into data-labeling startup Scale AI and hired its co-founder, Alexandr Wang, as part of its bid to attract talent from rivals in a fiercely competitive market.
The deal values Scale at $29 billion, double its valuation last year. Scale said it would “substantially expand” its commercial relationship with Meta “to accelerate deployment of Scale’s data solutions,” without giving further details. Scale helps companies improve their artificial intelligence models by providing labeled training data.
Scale will distribute proceeds from Meta’s investment to shareholders, and Meta will own 49 percent of Scale’s equity following the transaction.
Wang, who was also Scale’s chief executive, will “work on Meta’s AI efforts” in his new role. Meta, however, did not reveal his new job title.
Wang, 28, is set to remain on the board of directors at Scale, which has named Jason Droege as chief strategy officer. Droege helped launch Uber Eats as interim CEO and joined Scale in September.
“Meta’s investment recognizes Scale’s accomplishments to date and reaffirms that our path forward—like that of AI—is limitless,” Wang said. “I’m delighted that Jason will lead the next steps in Scale’s journey.”
Meta’s investment is the latest attempt by chief executive Mark Zuckerberg to give his $1.8 trillion social media company an edge in the race to develop more powerful AI models. Zuckerberg has been trying to poach top researchers and engineers from rival groups as he seeks to build out a new “superintelligence” team.
The deal is one of the biggest of its kind as tech companies increasingly strike agreements to invest in startups while acquiring their top staff. Last year, Microsoft paid $650 million to hire Inflection boss Mustafa Suleyman and his top lieutenants, and to license the startup’s technology. Google also paid $2.7 billion for a similar arrangement with Character.AI.
Meta has invested heavily in generative AI, with the majority of its planned $72 billion in capital expenditure this year earmarked for data centers and servers. The deal underlines the high price AI companies are willing to pay for data that can be used to train AI models.
Zuckerberg pledged last year that his company’s models would outstrip rivals’ efforts in 2025, but Meta’s most recent release, Llama 4, has underperformed on various independent reasoning and coding benchmarks.
The long-term goal of researchers at Meta “has always been to reach human intelligence and go beyond it,” said Yann LeCun, the company’s chief AI scientist at the VivaTech conference in Paris this week.
Building artificial “general” intelligence—AI technologies that have human-level intelligence—is a popular goal for many AI companies. An increasing number of Silicon Valley groups are also seeking to reach “superintelligence,” a hypothetical scenario where AI systems surpass human intelligence.
The core of Scale’s business has been data-labeling, a manual process of ensuring images and text are accurately labeled and categorized before they are used to train AI models.
Wang has forged relationships with Silicon Valley’s biggest investors and technologists, including OpenAI’s Sam Altman. Scale AI’s early customers were autonomous vehicle companies, but the bulk of its expected $2 billion in revenues this year will come from labeling the data used to train the massive AI models built by OpenAI and others.
The deal will result in a substantial payday for Scale’s early venture capital investors, including Accel, Tiger Global Management, and Index Ventures. Tiger’s $200 million investment is worth more than $1 billion at the company’s new valuation, according to a person with knowledge of the matter.
Additional reporting by Tabby Kinder in San Francisco
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