Meta Plans to Invest $10 Billions in AI Startup

Meta Platforms Inc. is reportedly in advanced talks to invest more than $10 billion in Scale AI, a fast-growing artificial intelligence startup, If finalized, this could become one of the largest private funding rounds ever and Meta’s largest external AI investment to date a strategic shift for a company that has traditionally prioritized internal AI development, Bloomberg first reported.

Founded in 2016 by Alexandr Wang, Scale AI provides data labeling services critical to training machine learning models. Its technology helps clean, tag, and structure data so AI models can learn effectively, making it a behind-the-scenes powerhouse in the ongoing generative AI boom.

With clients like Microsoft and OpenAI, Scale has already cemented itself as a key player in the industry.

The startup was last valued at $14 billion in a 2024 funding round supported by both Meta and Microsoft. More recently, Bloomberg reported that Scale was considering a tender offer valuing it at $25 billion, reflecting its rapid revenue growth from $870 million in 2024 to a projected $2 billion in 2025.

While neither Meta nor Scale has commented on the latest investment discussions, Reports say terms are still being finalized and subject to change. Regardless, the proposed investment signals a sharp turn in Meta’s AI strategy.

Until now, Meta has relied primarily on in-house research and open-source initiatives like its Llama large language model (LLM). Unlike rivals such as Microsoft, Amazon, and Alphabet, which have poured billions into external AI ventures like OpenAI and Anthropic, Meta has remained largely self-reliant.

However, that stance appears to be evolving. CEO Mark Zuckerberg declared in January that AI would be Meta’s top priority, outlining plans to spend up to $65 billion on AI in 2025. Central to this strategy is Llama, which powers Meta’s AI chatbot integrated into Facebook, Instagram, and WhatsApp and is already used by over 1 billion people monthly.

Scale AI’s growing role in defense technology may also be part of Meta’s motivation. The two companies are already collaborating on Defense Llama, a specialized version of Meta’s LLM adapted for military use.

Last week, Meta partnered with Anduril Industries, a defense contractor, to co-develop AI-powered helmets with augmented and virtual reality for the U.S. military. Meta has recently approved the use of its AI models by U.S. government agencies and contractors a rare move in Big Tech.

Meanwhile, Scale has also deepened its federal footprint. Earlier this year, it secured a U.S. Department of Defense contract for AI agent technology, which the company hailed as a “significant milestone in military advancement.”

As the AI arms race intensifies, Meta’s potential mega-investment in Scale could be a bold step to not only keep pace with peers but also redefine its position as a leader in both commercial and military-grade AI solutions.