Meta Platforms has finalized a significant strategic investment in Scale AI, a data-labeling startup, valuing the company at more than $29 billion. This deal, reportedly amounting to $14.3 billion for a 49% stake, marks Meta's second-largest investment ever, following its acquisition of WhatsApp. As a pivotal part of the agreement, Scale AI's 28-year-old co-founder and CEO, Alexandr Wang, will step down from his role to join Meta's new AGI-focused "superintelligence" unit, aiming to advance the tech giant's artificial intelligence efforts. Wang will remain on Scale AI's board of directors, and a few other Scale AI employees, referred to as "Scaliens," will also join him at Meta.

The move to bring Wang, a business-oriented leader akin to OpenAI's Sam Altman, aboard Meta's AI division is seen as a strategic bet by CEO Mark Zuckerberg. This aims to bolster Meta's AI ambitions and help it catch up with rivals like Google, OpenAI, and Microsoft, especially given previous staff exits and delayed AI model launches. By integrating Wang, Meta also seeks to gain insights into its competitors' data strategies, as many leading AI labs have contracted Scale AI for data services. Scale AI, founded in 2016, specializes in providing vast amounts of accurately labeled data, which is crucial for training sophisticated AI tools, including large language models like OpenAI's ChatGPT. The company employs gig workers through platforms such as Remotasks and Outlier to manually label this data.

With Wang's departure, Scale AI's Chief Strategy Officer, Jason Droege, a tech industry veteran and co-founder of Uber Eats, will assume the role of interim CEO. Droege expressed confidence in Scale AI's foundation for tackling AI's data challenges and pushing boundaries. The infusion of capital from Meta's investment will be utilized by Scale AI to accelerate innovation, strengthen partnerships, and distribute proceeds to equity holders, while Meta will hold a minority stake. Scale AI emphasized its commitment to remaining an independent entity. This latest investment builds upon Scale AI's previous funding round in May 2024, where it raised $1 billion from backers including Amazon and Meta, at a valuation of nearly $14 billion.

Wang, in a memo to Scale AI employees, described his departure as bittersweet but recognized the unique opportunity to contribute to Meta's "superintelligence" efforts. He highlighted Scale AI's journey since its inception amidst early AI breakthroughs, emphasizing data as the lifeblood of AI systems. Scale AI has grown to over 1,500 people and has become a trusted partner for model builders, enterprises, and governments. Beyond its core data labeling services, Scale AI also developed "Defense Llama," an AI model built on Meta's Llama 3, customized for US national security missions, including military and intelligence operations. This deal underscores Meta's intensified focus on generative AI, with Mark Zuckerberg recently noting that Meta's Gen AI assistant is used by a billion people monthly across its platforms.