Meta’s $10 Billion Bet on Scale AI Marks Shift in AI Strategy

Meta Platforms Inc. is reportedly finalizing negotiations to invest over $10 billion in Scale AI, a leading artificial intelligence startup. If completed, this would represent one of the largest private funding rounds ever and Meta’s most significant external AI investment to date. The move signals a major departure from the company’s traditional approach, which has focused primarily on internal AI development.

Founded in 2016 by Alexandr Wang, Scale AI plays a crucial role in the AI ecosystem by providing data labeling services essential for training machine learning models. Its technology helps structure, tag, and refine data, enabling AI systems to learn efficiently. The startup has become a key force in the generative AI space, working with clients such as Microsoft and OpenAI.

Financial Growth and Market Position

Scale AI was last valued at $14 billion following a 2024 funding round that included investments from Meta and Microsoft. More recently, Bloomberg reported that the company was considering a tender offer, which could push its valuation to $25 billion—underscoring its impressive revenue surge from $870 million in 2024 to an expected $2 billion in 2025.

While neither Meta nor Scale AI has publicly commented on the latest investment talks, reports indicate that discussions are still ongoing and terms may change. However, the potential investment highlights a significant evolution in Meta’s AI strategy.

Meta’s Changing Approach to AI

Historically, Meta has relied on its internal AI research and open-source initiatives such as Llama, its large language model (LLM). Unlike competitors like Microsoft, Amazon, and Alphabet—which have invested billions in external AI ventures such as OpenAI and Anthropic—Meta has maintained an independent approach.

That stance appears to be shifting. In January, CEO Mark Zuckerberg stated that AI is Meta’s highest priority, detailing plans to spend up to $65 billion on AI in 2025. Central to this vision is Llama, which powers Meta’s AI chatbot integrated into Facebook, Instagram, and WhatsApp—currently serving over 1 billion users monthly.

Defense and AI Integration

Scale AI’s growing involvement in defense technology may also be influencing Meta’s investment decision. The two companies have already partnered on Defense Llama, a specialized version of Meta’s LLM designed for military applications.

Just last week, Meta announced a collaboration with defense contractor Anduril Industries to develop AI-enhanced helmets featuring augmented and virtual reality for the U.S. military. The company has also recently permitted its AI models to be used by U.S. government agencies and contractors—an uncommon step for Big Tech.

Meanwhile, Scale AI has been expanding its presence in the defense sector. Earlier this year, it secured a contract with the U.S. Department of Defense for AI agent technology, marking a critical milestone in military AI advancement.

Competitive Landscape and Future Outlook

As the AI industry continues to evolve at a rapid pace, Meta’s potential mega-investment in Scale AI positions the company to compete more aggressively with its rivals while reinforcing its leadership in both commercial and military AI applications.