Meta In Talks To Purchase Scale AI For More Than $10 Billion

Meta is in talks to purchase the American data-annotation and AI–training startup Scale AI. The deal could sur $10 billion, making it one of the largest private-sector investments in history.

According to an exclusive report shared by Bloomberg, anonymous sources familiar with the matter disclosed the potential deal, but added that the negotiations are not finalized yet and that the shared could change.

Scale AI currently provides data labeling services for Microsoft and OpenAI’smachine learning training. The startup was valued at $14 billion last year and, as reported by Bloomberg, was in discussions for a new funding round that could raise its valuation to $25 billion.

“Meta is not going anywhere in of its investments around AI,” said Tom Mackenzie, one of Bloomberg’s analysts. “They’ve pledged to invest at least $60 billion dollars in AI this year.”

Representatives from Meta and Scale AI  declined to comment or provide further information about the potential deal.

The reasons behind Meta’s interest in such a large investment have not been disclosed. Experts have described it as a “rare” move, though both companies share an interest in defense technology, and Meta has been developing products for the U.S. military.

If the deal goes through, it would be one of the  largest private company acquisitions of all time—suring OpenAI’s recently announced acquisition of io for $6.5 billion.

In the past few months, Scale AI has been going through significant changes. The company partnered with the government of Qatar to enhance public services with AI technologies in a 5-year agreement.

While the startup continues to grow and secure major deals, it is also under scrutiny. The U.S. Department of Labor announced a few weeks ago that Scale AI is under investigation for potential Fair Labor Standards Act violations, and has been previously accused of exploitation of Kenyan workers.