Meta Platforms’ recent $14 billion investment in Scale AI, a deal that gives the Facebook parent a 49% nonvoting interest and values the data-labeling startup at $29 billion, is rippling through the AI world.
This may be a strategic victory for Meta, but the massive injection of funding could imperil Scale AI’s key relationships with other tech giants, such as Google and Microsoft, which are on the front lines of the AI arms race along with Meta.
The investment, made public on June 13, 2025, is Meta’s second largest ever, and intended to beef up its AI, in particular the training and testing of large language models, for a newly announced “superintelligence” lab. As part of the deal, Scale AI CEO Alexandr Wang will join Meta to head up its superintelligence efforts, but will remain on Scale’s board.
But action has generated a great deal of disquiet among Scale AI’s current customers. Reuters has exclusively reported that Scale AI’s biggest customer, Alphabet Inc’s Google, is looking to stop doing business with the firm. Google also planned this year to spend about $200 million on human-labeled training data from Scale AI necessary for building its Gemini AI model, according to the reports.
Fears are growing that Meta’s large holding could put Google’s proprietary AI research and roadmap in the hands of a main competitor. Google has reportedly already started talks with competitor data labeling companies about shifting over its huge workload.
The ripple effect of that goes beyond Google. Other technology companies, including Microsoft and xAI, an artificial-intelligence start-up backed by Elon Musk, are also said to be reconsidering their ties with Scale AI.
The other large AI developer, OpenAI, which is barred by its investors from being too dependent on a single cloud provider, drastically scaled back its participation in Scale AI months ago, and it spends far less than Google.
Those companies worry that sharing proprietary data and prototype products with Scale AI’s workers — who now include Meta — could provide their chief rival with too much knowledge of their business plans and technical blueprints.
An existential threat – A loss of some of its biggest customers could prove a potential existential threat for Scale AI — despite its soaring valuation. Its business is based mostly on a few large clients from whom it gets most of its revenue, so when those clients leave, it leaves the company vulnerable Like this departure.
Though Scale AI has vowed — in the wake of the Palantir deal — to maintain its customer relationships and that its business is strong, the industry is closely watching how these changing alliances will bulk up and flex the muscles of AI development, particularly when it comes to data annotation.
