Meta finalizes $15 billion deal for Scale AI stake
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Meta has finalized a deal to pay around $15 billion in cash for a 49% stake in Scale AI, sources told Axios.
Why it matters: The deal will help transform Meta's AI efforts, but also raises big questions for the future of Scale, a company best known for labeling data for all the major AI players, including Google and OpenAI.
Catch up quick: The investment, which gives Meta a minority non-voting stake, values Scale at more than $29 billion.
- Scale CEO Alexandr Wang will join Meta as part of its effort to reboot its AI research in pursuit of "superintelligence."
- Chief strategy officer Jason Droege, a former Uber Eats executive, will serve as interim CEO, the company said.
- Of Scale's roughly 1,500 employees, just a small number are expected to join Meta.
What they're saying: "Meta has finalized our strategic partnership and investment in Scale AI," a Meta spokesperson said.
- "As part of this, we will deepen the work we do together producing data for AI models and Alexandr Wang will join Meta to work on our superintelligence efforts. We will share more about this effort and the great people joining this team in the coming weeks."
Zoom in: In a statement, Droege and Wang said Scale aimed to continue serving other companies even as it expands its work with Meta.
- "To our valued customers, we remain committed to partnering with you to build customized AI solutions that transform your organizations," Droege said.
- Scale said employees and investors would share in the proceeds of the deal.
The intrigue: Other big AI players may be wary of doing business and sharing data with a company so tightly aligned with Meta.
- Even though Meta isn't buying all of Scale, regulators may also still raise objections.
The big picture: Big Tech is slicing off people, patents and other parts of AI startups, without buying them whole.
- Microsoft did it last year with chatbot Inflection AI, in which Microsoft got the services of Inflection CEO (and DeepMind co-founder) Mustafa Suleyman as well as other colleagues and technology. Inflection's investors got an immediate return while the company continued operating, slimmed-down and enterprise-focused.
- Google made a similar arrangement with Character.AI, acquiring key talent and a technology license and handing over millions to Character.AI's investors without buying the entire company.
Editor's note: This story has been updated with new details throughout.
