Meta eyes dominance in AI race with potential $10B investment in Scale AI

Meta is reportedly in advanced discussions to invest more than $10 billion in Scale AI, a data-labeling startup that plays a pivotal role in the development and training of artificial intelligence systems. If finalized, the deal would mark the largest AI investment in Meta’s history and one of the biggest private funding rounds ever in the sector, underscoring the tech giant’s ambitions to cement its position as a global AI leader.

Scale AI, founded in 2016 and headquartered in San Francisco, provides data annotation services that streamline the training of machine learning models. Its client roster already includes major AI players such as Microsoft, OpenAI, and Meta itself. The company’s data-labeling services are essential for enhancing model accuracy, reducing training time, and decreasing the manual burden on AI developers. Much of this work is performed by contractors, a labor practice that recently came under scrutiny before a U.S. Department of Labor probe concluded without further action.

Bloomberg reports that Meta, which previously invested in Scale AI during its $1 billion Series F funding round, is now considering a significantly larger stake as it continues to expand its AI infrastructure. Scale AI was valued at $13.8 billion during that round and is projected to nearly double its revenue from $870 million last year to a forecasted $2 billion this year.

Beyond financial investment, Meta is also scaling its AI hardware capacity. The company currently operates with an estimated 350,000 Nvidia H100 chips—surpassing the compute capacity of rivals OpenAI and xAI—and is developing proprietary AI hardware. It is also constructing a 2-gigawatt data center to support its growing computing needs.

The proposed investment in Scale AI would not only secure Meta deeper access to critical data infrastructure but could also provide a strategic advantage through closer integration with Scale’s tools, including its defense-oriented projects. Notably, Scale recently built “Defense Llama,” a military-focused large language model developed on top of Meta’s own Llama 3 architecture.