OpenAI plans to phase out Scale AI work following Meta deal: report

Microsoft-backed (NASDAQ:MSFT) OpenAI plans to phase out the data work it receives from Scale AI after Meta Platforms (NASDAQ:META) invested heavily in Scale and hired its CEO, according to Bloomberg.

OpenAI has utilized Scale for its high-quality data to help build artificial intelligence models. However, an OpenAI spokesperson said that Scale only accounted for a “small fraction” of its data needs, and it was slowing down its utilization even before the Meta deal was announced last week, Bloomberg reported.

The report seems at odds with comments made by OpenAI’s Chief Financial Officer Sarah Friar last week at the VivaTech conference in Paris.

“We don’t want to ice the ecosystem because acquisitions are going to happen,” Friar said. “And if we ice each other out, I think we’re actually going to slow the pace of innovation.”

Late last week, Meta announced a $14.3B investment in Scale, acquiring a 49% stake and valuing the San Francisco-based company at more than $29B. A key aspect of the deal includes Scale CEO Alexandr Wang joining Meta to head its “superintelligence” team focused on artificial general intelligence, or AGI.

A primary goal of OpenAI is the pursuit of creating AGI, which the company highlighted again in March when it announced a new $40B funding round for that purpose.

Last week, Google (GOOG)(GOOGL) also indicated it plans to cut ties with Scale following the massive Meta investment, according to Reuters, which cited sources familiar with the issue. xAI, which is run by Tesla (TSLA) CEO Elon Musk, also plans to phase out its work with Scale.