Meta Platforms Inc. is reportedly in advanced negotiations to invest over $10 billion in Scale AI, a rapidly expanding artificial intelligence startup. If finalized, this deal could become one of the largest private funding rounds ever and represent Meta’s biggest external AI investment to date. This move marks a significant strategic shift for Meta, a company that has traditionally focused on developing AI technologies in-house rather than investing heavily in external ventures.
Scale AI: The Hidden Powerhouse Behind Generative AI
Founded in 2016 by Alexandr Wang, Scale AI has become an essential player in the AI industry by providing critical data labeling services that enable machine learning models to train effectively. Its technology cleans, tags, and structures data, which is fundamental to the success of AI applications, especially in the burgeoning field of generative AI. Despite operating largely behind the scenes, Scale’s impact is vast, serving prominent clients like Microsoft and OpenAI.
The startup’s rapid growth reflects its importance. In 2024, Scale was valued at $14 billion during a funding round supported by both Meta and Microsoft. More recently, reports indicate that Scale is considering a tender offer valuing the company at $25 billion, fueled by its explosive revenue growth—from $870 million in 2024 to an expected $2 billion in 2025. These numbers underscore the company’s expanding influence across commercial and defense sectors.
Meta’s Evolution from In-House AI to External Partnerships
Until now, Meta has primarily relied on internal research and open-source initiatives like Llama, its large language model powering AI chatbots across Facebook, Instagram, and WhatsApp, used by over one billion people monthly. Unlike competitors such as Microsoft, Amazon, and Alphabet, which have heavily invested in external AI firms like OpenAI and Anthropic, Meta has remained largely self-sufficient.
However, this stance is evolving rapidly. Earlier this year, CEO Mark Zuckerberg announced that AI would become Meta’s top priority, with plans to allocate up to $65 billion toward AI development in 2025. The prospective investment in Scale signals a broader willingness to strengthen external collaborations to accelerate Meta’s AI capabilities.
Defense Collaboration Adds Another Layer to Meta’s AI Ambitions
Beyond commercial AI applications, Scale AI has increasingly positioned itself in defense technology, a sector of growing importance for Meta. The two companies already collaborate on Defense Llama, a specialized adaptation of Meta’s LLM tailored for military use. This partnership hints at Meta’s intention to expand its AI influence into national security arenas.
Meta’s recent collaboration with Anduril Industries, a defense contractor, to develop AI-powered augmented and virtual reality helmets for the U.S. military further demonstrates its commitment to defense applications. Additionally, Meta’s unprecedented approval of its AI models for use by U.S. government agencies and contractors highlights its willingness to engage with federal entities—a rare move among Big Tech firms.
On its part, Scale AI secured a contract earlier this year with the U.S. Department of Defense for AI agent technology, which it described as a “significant milestone in military advancement.” This growing federal footprint likely strengthens Meta’s motivation to invest deeply in Scale as part of a broader AI strategy encompassing both commercial and defense sectors.
Implications of Meta’s Investment in the AI Landscape
As the AI arms race intensifies globally, Meta’s potential mega-investment in Scale AI represents a bold step to maintain competitiveness. By investing heavily in a key AI infrastructure provider, Meta not only bolsters its capabilities but also positions itself as a leader in delivering both commercial and military-grade AI solutions.
This move may help Meta bridge gaps between its internal AI research and the rapidly advancing AI innovations driven by startups like Scale. Moreover, the investment signals Meta’s recognition that collaboration with external AI firms is essential to keeping pace with rivals and pushing the boundaries of AI technology.
What Lies Ahead for Meta and Scale AI
Although neither Meta nor Scale AI has publicly commented on the ongoing talks, and the terms remain subject to change, the reported discussions reveal a decisive shift in Meta’s approach to AI investment. Should the deal close, it could redefine the competitive dynamics of the AI industry, with Meta leveraging Scale’s advanced data infrastructure and defense partnerships to accelerate innovation.
Furthermore, this investment could pave the way for deeper integration of AI technologies into Meta’s existing platforms and open new avenues in government and defense sectors. As AI becomes more central to global technological progress, Meta’s strategic bet on Scale AI may well determine its future role as a dominant AI player.
In conclusion, Meta’s proposed $10 billion investment in Scale AI not only reflects the startup’s rapid growth and importance but also marks a strategic evolution in Meta’s AI ambitions. By embracing external partnerships alongside its internal developments, Meta signals its readiness to compete aggressively in both commercial and defense AI arenas, shaping the future landscape of artificial intelligence.
