Meta is said to weigh multibillion-dollar investment in AI startup Scale AI

Meta Platforms (NASDAQ:META) is in advanced discussions to invest potentially more than $10 billion into artificial intelligence startup Scale AI, Bloomberg News reported Sunday, citing people familiar with the talks. If completed, the deal would rank among the largest private funding rounds in history.

The terms remain in flux and no final agreement has been reached. Social-media giant Meta declined to comment, and Scale had yet to respond to inquiries, Bloomberg News reported.

Scale AI, founded in 2016 by Alexandr Wang, provides data-labeling services used to train machine learning systems. The company’s technology underpins efforts by clients such as Microsoft (MSFT) and OpenAI, and it has emerged as a central player in the generative AI surge.

Its most recent funding round in 2024 pegged its valuation at approximately $14 billion, with investors including Meta (NASDAQ:META) and Microsoft (MSFT). Earlier this year, reports suggested the company was pursuing a tender offer that could value it as high as $25 billion.

Major commitment to AI

If finalized, the investment would represent Meta’s (META) most significant financial commitment to an external AI firm, marking a departure from its usual strategy of internal development and open-source model sharing. While competitors like Microsoft (MSFT), Amazon (AMZN) and Google’s parent Alphabet (GOOG) (GOOGL) have invested billions into startups such as OpenAI and Anthropic, often through cloud credits, Meta (META) lacks a cloud infrastructure business, leaving the structure of its potential investment still unclear.

Chief Executive Mark Zuckerberg has made artificial intelligence Meta’s (META) top strategic priority, announcing in January that the company could spend up to $65 billion on AI-related initiatives in 2025. A major focus is its Llama family of large language models, which Meta (META) hopes will become an industry standard. Llama is already integrated across Facebook, Instagram and WhatsApp, where Meta’s chatbot is used by an estimated 1 billion people monthly.

Meta’s ambitions for AI, military usage

Scale’s rapid expansion continues alongside (META) Meta’s AI ambitions. The startup reported $870 million in revenue last year and projects sales to surpass $2 billion in 2025, according to previous Bloomberg coverage.

The two companies also align on defense-related AI development. Last week, Meta (META) revealed a new partnership with defense tech firm Anduril Industries to build advanced military equipment, including a mixed-reality helmet powered by AI. Meta (META) has also given the green light for government agencies and defense contractors to deploy its models.

One such initiative is Defense Llama, a customized version of Meta’s (META) Llama platform tailored for military use, developed in collaboration with Scale. Earlier this year, Scale secured a Defense Department contract focused on AI agents, describing the win as a major step in advancing military AI capabilities.