Meta Platforms is negotiating a potential investment exceeding $10 billion in artificial intelligence startup Scale AI, according to Bloomberg. The social media company's talks with Scale AI could result in one of the largest private funding rounds in history. Reuters confirmed the negotiations remain ongoing, with terms not yet finalized and subject to change.

Scale AI, founded in 2016 by CEO Alexandr Wang, specializes in data labeling services essential for training machine learning models. The company achieved a $13.8 billion valuation in May 2024 after raising $1 billion, with Business Standard reporting the company generated approximately $870 million in revenue in 2024. Scale AI projects revenue will double to $2 billion in 2025.

AI Investment Market Reaches Record Levels

The potential Meta-Scale AI deal reflects broader investment trends in artificial intelligence. Crunchbase reported that AI-related companies captured over $100 billion in global venture funding during 2024, representing 33% of all venture capital activity. This marked an 80% increase from $55.6 billion in 2023.

AI startups captured 46.4% of the total $209 billion raised by US companies in 2024, according to data from PitchBook. The surge reflects investor confidence in AI infrastructure companies like Scale AI that provide essential services for training large language models. FTI Consulting noted that AI deals represented 35.7% of global deal value in 2024, up from 24.7% in 2023.

Foundation model developers captured significant portions of generative AI investment, with companies like OpenAI raising $6.6 billion and Elon Musk's xAI securing $12 billion. These outsized funding rounds demonstrate continued investor appetite for AI infrastructure despite many companies remaining unprofitable.

Scale AI's Strategic Position in Data Infrastructure

Scale AI operates as a critical infrastructure provider in the AI ecosystem, using both automation and human contractors to deliver high-quality labeled data. The company processes data for major technology firms including OpenAI, Microsoft, Toyota, and Meta itself. TechCrunch previously reported Scale AI's workforce includes tens of thousands of contributors across more than 9,000 cities worldwide.

The company's business model centers on providing Reinforcement Learning from Human Feedback (RLHF) services, which help align AI models with human preferences. Scale AI also offers evaluation platforms for testing large language models and maintains partnerships with defense agencies including the US Department of Defense. The company collaborated with Meta on Defense Llama, a military-adapted version of Meta's language model.

However, Scale AI faces regulatory scrutiny. SiliconANGLE reported the US Department of Labor is investigating the company over allegations of violating Fair Labor Standards Act provisions related to contractor compensation. Scale AI disputes these allegations and claims full compliance with federal labor laws.

Market Implications and Future Outlook

Industry analysts present mixed views on large AI investments. Supporters argue that data labeling represents a bottleneck in AI development, making Scale AI's services increasingly valuable as companies exhaust easily available training data. The partnership could provide Meta with exclusive access to high-quality datasets and greater control over its AI training pipeline.

Critics question whether massive valuations in the AI sector reflect sustainable business fundamentals. James Cross of Franklin Venture Partners told Reuters that AI companies "will need to smash very significant business milestones this year to continue enjoying unlimited access to infinity capital." The concern reflects broader market correction from the speculative funding environment of 2021-2022.

Meta CEO Mark Zuckerberg allocated up to $65 billion for AI-related projects in 2025, positioning artificial intelligence as central to the company's strategy. The potential Scale AI investment would represent Meta's largest external AI funding commitment, reflecting a shift toward strategic partnerships rather than purely internal development.

The broader AI investment landscape faces uncertainty as venture capitalists exercise increased selectivity. While Mintz reported global AI venture funding reached $5.7 billion in January 2025, representing 22% of total funding, investors now prioritize sustainable business models over pure innovation. The emphasis on profitability and proven market demand represents a maturation of the AI investment market from earlier speculative phases.

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