Meta bets big as Scale AI hits $29B valuation the race with OpenAI and Google just got real.
In brief
- -Meta has acquired a 49% stake in Scale AI for $14.3B, its second-largest deal ever.
- -Scale CEO Alexandr Wang has joined Meta to lead a new superintelligence lab.
- -The investment illustrates Meta’s aggressive strategy to compete with the likes of OpenAI and Google.Sure!
Meta, the American tech giant, has made a major move in the AI space by investing $14.3 billion in Scale AI the data-labeling startup playing a key role in training next-generation AI systems. With this deal, Meta has taken a 49% stake in the company, boosting Scale AI’s valuation to over $29 billion.
At the center of this bold push is Scale’s young founder, Alexandr Wang, who’s been tapped to help Meta build a cutting-edge “superintelligence” lab with the long-term goal of achieving artificial general intelligence (AGI). This marks Meta’s second-largest investment ever, trailing only its $19 billion acquisition of WhatsApp back in 2014.
Scale AI announced that founder Alexandr Wang will remain on the company’s Board of Directors, while Chief Strategy Officer Jason Droege will step in as interim CEO.
Wang shared a heartfelt message with employees on X (formerly Twitter), calling Meta’s investment “a major milestone and a powerful validation of the hard work you’ve all put into Scale’s mission.”
For Meta, which has been ramping up its AI efforts including the launch of a new model and a standalone AI app in recent months the deal marks a significant step forward. According to the company, the partnership will help “deepen the work” around producing high-quality data to power advanced AI systems.
Met’s AI Race.
Meta’s latest move underscores the urgency of its efforts to stay competitive in the fast-evolving AI race. With growing pressure from rivals developing “frontier models” powerful, large-scale AI systems pushing the edge of what’s possible the company is clearly trying to catch up.
But this also brings a deeper tension into focus: the growing divide between centralized tech giants like Meta and a new generation of decentralized platforms. Renz Chong, CEO of Sovrun, a modular on-chain platform backed by a16z, highlighted this contrast in a statement to BetaGrok.
“Earlier this year, we saw open-source frontier models emerge that rival Big Tech’s closed systems,” Chong said. “That sends a strong message cutting-edge AI doesn’t have to be centralized or proprietary.”
Still, many decentralized AI efforts face their own limitations. A number of projects continue to depend on centralized inference endpoints or off-chain APIs, which undercuts their decentralization goals.
“Foundational infrastructure is being built,” Chong added. “We’re seeing the rise of decentralized compute networks and incentivized training layers and while it’s early, the groundwork is being laid for a truly open AI ecosystem.”
What is Scale AI?
Scale AI has carved out a crucial niche in the AI ecosystem, specializing in data labeling a foundational service for training modern AI systems. The startup counts major players like Google and OpenAI among its clients and relies on a global workforce of human annotators to perform the labor-intensive task of classifying data, much of which is done outside the U.S.
Meta’s reported minority stake in Scale AI allows the startup to retain operational independence a strategic move likely aimed at sidestepping additional regulatory pressure, especially as Meta remains under scrutiny in multiple antitrust investigations. Just this past April, the company faced backlash after allegations of aiding China’s AI development led to a U.S. Senate inquiry.
As tech giants double down on consolidating AI power, decentralized alternatives are beginning to emerge with their own visions. Sovrun, for example, has partnered with Virtuals Protocol to launch ReadyGamer a platform that brings AI-powered NPCs into popular game worlds.
While revenue for such projects dipped earlier in the year, recent data from Virtuals Protocol suggests a gradual recovery, with user activity trending back toward previous highs.
According to Sovrun CEO Renz Chong, the real transformation lies beyond just building smarter systems. “The real shift,” he says, “is about changing who gets to shape these technologies and ensuring the outcomes actually serve the communities behind them.”
