Meta May Invest Over $10 Billion in AI Data Labeling Firm Scale AI, Backed by Nvidia and Amazon

Meta Platforms is reportedly negotiating a deal that may see it invest more than $10 billion in artificial intelligence startup Scale AI, according to a Bloomberg News report. Although the terms of the deal are still under discussion and not yet finalized, insiders suggest it could be a major strategic shift for Meta.

As per the report,

“The terms of the deal were not yet finalized and could still change.”

Scale AI declined to comment, and Meta has not issued an official response to Reuters’ request for comment as of now.

About Scale AI: Backed by Nvidia, Amazon, and Meta

A Platform Powering AI Innovation Across 9,000+ Cities

Founded in 2016, Scale AI is a data labeling startup that has gained backing from tech giants including Nvidia, Amazon, and Meta. The company is currently valued at approximately $14 billion following a major 2024 funding round involving Meta and Microsoft.

“Scale AI also provides a platform for researchers to exchange AI-related information, with contributors in more than 9,000 cities and towns.”

This potential deal would mark Meta’s largest external investment in artificial intelligence to date.

Meta’s AI Investment Strategy: Shifting Gears

From Internal R&D to Strategic Partnerships

Traditionally, Meta has focused on in-house AI development and open-source contributions to drive its innovations. However, this proposed investment in Scale AI suggests a strategic pivot towards external partnerships and infrastructure support.

For context, Microsoft has invested over $13 billion in OpenAI, while Amazon and Alphabet have each committed billions to Anthropic, another key player in the generative AI race.

Zuckerberg’s Vision: $65 Billion in AI by 2025

Llama and Meta’s AI-Fueled Future

Meta CEO Mark Zuckerberg has put AI at the core of Meta’s future strategy, announcing plans to invest up to $65 billion in AI projects by 2025. Among the key initiatives is Llama, Meta’s AI chatbot integrated into Facebook, Instagram, and WhatsApp, which now reaches 1 billion users globally each month.

“Earlier this year, he revealed plans to allocate up to $65 billion toward AI initiatives in 2025.”

History of Meta Platforms

The history of Meta Platforms, Inc., is primarily the history of Facebook, the social networking giant that dominated the early 21st century's digital landscape, before its strategic pivot to the "metaverse."

1. The Founding of Facebook (2003-2004)

• Facemash (2003): The earliest precursor to Facebook was "Facemash," a controversial website created by Mark Zuckerberg in October 2003 while he was a student at Harvard University. The site allowed students to rate the attractiveness of other students by comparing photos obtained from university directories. It was quickly shut down due to privacy violations.

• TheFacebook.com (February 4, 2004): Learning from the Facemash experience, Zuckerberg, along with fellow Harvard students Eduardo Saverin, Dustin Moskovitz, Andrew McCollum, and Chris Hughes, launched "TheFacebook.com" on February 4, 2004. Initially, it was exclusively for Harvard students, allowing them to create profiles, connect with classmates, and share information.

• Early Expansion: The platform quickly gained popularity within Harvard and soon expanded to other universities in the Boston area (like Stanford, Columbia, and Yale), the Ivy League, and then gradually to most universities in the United States and Canada.

2. Growth and Expansion: From College Network to Global Phenomenon (2005-2011)

• Dropping "The" (2005): In August 2005, the company acquired the domain name "facebook.com" for $200,000 and officially dropped "The" from its name, becoming simply Facebook.

• Open to Everyone (2006): A pivotal moment arrived in September 2006 when Facebook opened its registration to anyone aged 13 and older with a valid email address. This move dramatically accelerated its user growth globally.

• Key Features: Over these years, Facebook introduced defining features that became central to its success:

  • News Feed (2006): While initially controversial, the News Feed revolutionized how users consumed content, providing a continuously updated stream of posts from friends and pages.

  • Facebook Platform (2007): This allowed third-party developers to create applications that integrated with Facebook, leading to an explosion of games (like Zynga's FarmVille) and other interactive experiences on the platform.

  • "Like" Button (2009): This simple but highly impactful feature became a ubiquitous symbol of social media engagement.

• Dominance: By the late 2000s, Facebook had surpassed competitors like MySpace to become the world's most popular social networking platform.

3. Major Acquisitions and Public Offering (2012-2014)

• Instagram Acquisition (2012): In April 2012, just before its IPO, Facebook acquired the photo and video-sharing app Instagram for approximately $1 billion. This proved to be a prescient move, securing a major future competitor and enabling Facebook's continued dominance in visual social media.

• Initial Public Offering (IPO) (May 2012): On May 18, 2012, Facebook went public with one of the largest IPOs in technology history, raising $16 billion and valuing the company at over $100 billion.

• WhatsApp Acquisition (2014): In February 2014, Facebook acquired the popular mobile messaging service WhatsApp for an astounding $19 billion. This acquisition solidified Facebook's control over global communication, bringing over a billion users into its ecosystem.

• Oculus VR Acquisition (2014): Also in 2014, Facebook acquired Oculus VR for approximately $2 billion, marking its ambitious entry into virtual reality technology. This acquisition was a clear signal of Mark Zuckerberg's long-term vision beyond traditional social media.

4. Challenges, Controversies, and the Rebrand (2016-2021)

• Misinformation and Election Interference (Post-2016): Following the 2016 U.S. presidential election, Facebook faced intense scrutiny over its role in the spread of misinformation, fake news, and foreign interference on its platform.

• Cambridge Analytica Scandal (2018): In March 2018, the Cambridge Analytica data scandal erupted, revealing that a political consulting firm had improperly accessed the data of millions of Facebook users without their consent. This led to widespread public outcry, significant regulatory investigations, and a severe blow to Facebook's reputation regarding user privacy.

• Regulatory Scrutiny: The company faced increasing antitrust scrutiny, government hearings, and calls for stricter regulation globally due to its immense market power and data practices.

• Whistleblowers: Several whistleblowers, notably Frances Haugen in 2021, came forward with internal documents, alleging that Facebook prioritized profits over user safety and well-being, especially concerning misinformation and the mental health of young users.

• Rebranding to Meta (October 2021): Amidst growing controversy and a desire to signal a new strategic direction, Mark Zuckerberg announced in October 2021 that Facebook's parent company would be rebranded as Meta Platforms, Inc. This name change reflected the company's ambitious pivot towards building the "metaverse," a collective virtual shared space that would integrate virtual and augmented reality.

Conclusion: Meta’s AI Bet Strengthens Competitive Edge

Meta’s potential $10 billion investment in Scale AI signals the company’s evolving approach to artificial intelligence. As the race for dominance in the AI space intensifies, Meta appears ready to match—and even surpass—its competitors’ efforts by building strategic alliances beyond its internal R&D. Backing a startup like Scale AI not only strengthens Meta’s AI capabilities but also ensures access to critical data infrastructure that supports large-scale model training.

As other giants like Microsoft and Amazon continue to support AI startups such as OpenAI and Anthropic, Meta’s push into third-party AI investments reflects a broader industry trend toward collaborative innovation. With CEO Mark Zuckerberg already committing to a $65 billion AI spend by 2025, this investment could become a cornerstone of Meta’s long-term tech evolution, shaping the future of platforms that impact billions worldwide.