Meta Platforms Inc. is reportedly in advanced negotiations to invest more than $10 billion in Scale AI, a rapidly growing artificial intelligence startup specialising in data labelling and machine learning model training. If finalised, this investment could become one of the largest private funding rounds in history and represent Meta’s largest external AI investment to date, signalling a major strategic shift for a company that has traditionally prioritised internal AI development.
Scale AI: A Key Player in Generative AI
Founded in 2016 by Alexandr Wang, Scale AI provides essential data labelling services crucial for training machine learning models. The company helps clean, tag, and structure data, ensuring AI models can learn effectively, making it a vital player in the burgeoning generative AI industry.
Scale AI has already cemented itself as a key player in the field with high-profile clients, including Microsoft and OpenAI. The company’s impressive growth was highlighted in a 2024 funding round, where it was valued at $14 billion. Reports suggest that Scale AI is now considering a tender offer that could value the company at $25 billion, reflecting rapid revenue growth—from $870 million in 2024 to a projected $2 billion in 2025.
Meta’s Strategic Shift in AI
Meta’s potential investment in Scale AI marks a sharp pivot in its AI strategy. Until now, Meta has relied primarily on in-house AI research and open-source projects like its Llama large language model (LLM). While competitors such as Microsoft, Amazon, and Alphabet have poured billions into external AI ventures like OpenAI and Anthropic, Meta has remained largely self-reliant in its AI development.
However, this approach appears to be changing. In January 2025, CEO Mark Zuckerberg outlined plans to make AI Meta’s top priority, committing up to $65 billion in AI investments for the year. A central element of this strategy is Llama, the AI model powering Meta’s chatbots integrated into Facebook, Instagram, and WhatsApp, which are already used by over 1 billion people monthly.
Meta and Scale AI: A Growing Partnership
The investment talks come amid growing collaboration between Meta and Scale AI. The two companies have already partnered on Defence Llama, a specialised version of Meta’s Llama AI model adapted for military applications. This collaboration hints at Meta’s evolving interest in defence technology, as both companies have deepened their involvement with U.S. government agencies.
Recently, Meta took a rare step in the tech industry by approving its AI models for use by U.S. government agencies and contractors. Meta also expanded its defence technology partnerships, including a new collaboration with Anduril Industries, a defence contractor, to develop AI-powered helmets with augmented and virtual reality capabilities for the U.S. military.
Scale AI’s Military and Government Footprint
Scale AI’s involvement with defence technology has also grown. Earlier this year, the company secured a U.S. Department of Defence contract for AI agent technology, marking a significant milestone in the company’s expansion into military-grade solutions. The company’s role in providing AI-driven solutions for national security further solidifies its importance in the evolving AI landscape.
The AI Arms Race: Meta’s Bold Move
As the AI arms race continues to heat up, Meta’s potential $10 billion investment in Scale AI could be a bold move to ensure the company stays competitive with its industry peers. The deal could also redefine Meta’s position as a leader in both commercial and military-grade AI solutions, enabling it to deepen its ties with government contracts and expand its AI capabilities across multiple industries.
A New Era for Meta’s AI Strategy
Meta’s discussions to invest in Scale AI represent a significant turning point in the company’s AI journey. If finalised, the deal will mark Meta’s largest external AI investment and signal its commitment to expanding its role in both the commercial and defence AI markets. With Scale AI’s rapid growth and expanding influence in the AI sector, this investment could solidify Meta’s position as a key player in the global AI race, ensuring the company remains at the forefront of both generative AI and military AI technologies
