95-year-old Chinese-American Scale AI to receive over $10 billion from Meta, a new milestone in private company funding

Meta is working withScale AINegotiating an investment of more than $10 billion.

This would be the largest external AI investment ever made by Facebook's parent company, Meta, and one of the largest funding events ever for a private company.

Publicly available information shows thatScale AIFounded in 2016, it was co-founded by Alex Wang and Lucy Guo.

Alex Wang is of Chinese descent and received his B.S. in Computer Science from the University of California, Berkeley. He has worked at Palantir and Facebook in software development, and also co-founded an e-commerce company called Skylight with Y Combinator.

Alex Wang

Lucy Guo is a classmate of Alex Wang and worked as a software engineer at Pinterest. She co-founded a company called Papaya Games with Wang to develop mobile games.

In terms of funding, Scale AI had secured a $1 billion Series F funding round on May 22, 2024, co-invested by Amazon, Intel, AMD, Cisco, Meta, ServiceNow, Tiger Global Fund and others, valuing it at $13.8 billion.

Scale AI has transformed its business model, increasingly relying on highly paid contract workers with graduate degrees to optimize AI systems and deepening its partnership with the U.S. government through defense contracts.

Three months after DeepSeek shook up the tech world with a big model that rivaled the best in the U.S., 28-year-old AI executive Alexandr Wang made a Capitol Hill appearance to talk to policymakers about the strategic initiatives needed to keep the U.S. in the driver's seat.

Mr. Wang Wang said at the April hearing that the U.S. needs to create a "national AI data reserve" to provide sufficient power for data centers and avoid the onerous burden of a patchwork of state regulations. Lawmakers welcomed his proposal." It's good to see you again in Washington," said Rep. Neil Dunn, Republican of Florida, "You're becoming a regular here."

Scale AI CEO Mr. Wang isn't quite the household name that OpenAI's Sam Altman is, but in recent years he and his company have become increasingly influential in the tech and policy worlds. Scale uses a large outsourced workforce to tag data used to train and improve AI models for tech companies such as Meta Platforms and OpenAI, as well as to help companies develop customized AI applications. The company is increasingly recruiting highly educated professionals such as PhDs and nurses to work on more complex models, according to people familiar with the matter. In short: The three pillars of AI are chips, talent, and data-and Scale is the dominant player in this last area.

Now, the startup is set to rise even higher.

According to Bloomberg News, Meta is in talks to make a multi-billion dollar investment in Scale. The financing, which could be valued at more than $10 billion, would be one of the largest private-sector financings ever. The startup was already valued at about $14 billion in a 2024 funding round that included Meta.

In many ways, Scale's rise mirrors that of OpenAI. Both companies were founded about a decade ago and are betting that the industry is at what Mr. Wang calls an "AI tipping point." Their CEOs are close friends who briefly lived together, and both specialize in networking and have appeared before Congress as AI representatives. Their CEOs are close friends who briefly lived together, both specialize in networking, and both have appeared before Congress as representatives of the AI industry, while OpenAI has also received tens of billions of dollars in investment from tech giants.

At times, the work has made Scale a target, with people criticizing it for having a hidden workforce supporting AI development in places like Kenya and the Philippines. The company has come under scrutiny for its reliance on thousands of overseas contract workers, who are paid a pittance to sift through vast amounts of web data, and some have said they've been traumatized by vetting content.Scale founder Alex Wang said in a 2019 interview with Bloomberg that the company's contract workers earn "substantial" income -- "at the 60% to 70% decile of the local pay scale."

Scale AI spokesperson Joe Osborne noted that the U.S. Department of Labor has recently terminated its investigation into the company's fair labor regulation compliance.

Scale's business has evolved. More tech companies are experimenting with AI-generated synthetic data to train AI systems, which may reduce the need for Scale's traditional services. However, leading AI labs are also struggling to acquire enough high-quality training data to build more advanced AI systems that can handle complex tasks and match or exceed human performance.

To meet this demand, Scale is increasingly turning to highly paid contractors with graduate degrees to improve AI systems. These experts engage in a process called "reinforcement learning" - the system is rewarded for giving correct answers and penalized for incorrect ones.

Experts working with Scale are responsible for constructing complex to-be-solved puzzles (essentially test questions) for the model, according to a person familiar with the matter who requested anonymity to disclose inside information. As of early 2025, 12% of the contributors involved in the model improvement process hold PhDs in fields such as molecular biology, and more than 40% hold master's degrees, law degrees, or MBAs in their fields, the person said.

The process is primarily geared toward organizations looking to apply AI to the medical and legal fields, the person said. For example, one of the current focus directions is to improve the ability of AI models to respond to tax law inquiries, which vary widely from country to country and even state to state.

This type of strategic positioning is driving significant growth for the company. Scale will have revenue of about $870 million in 2024 and is expected to have revenue of $2 billion this year, Bloomberg News reported in April. Demand for Scale's expert networks has surged, driven by the DeepSeek program, as more companies invest in AI models that mimic human reasoning and perform complex tasks, people familiar with the matter said.

Scale has also deepened its cooperation with the U.S. government through defense contracts. Mr. Wang has actively reached out to members of Congress who are concerned about the rise of AI in China. Former company executive Michael Krazios is now President Trump's chief technology advisor, helping to shape U.S. AI policy.

For Meta, a deeper partnership with Scale could help it catch up with AI rivals like Google and OpenAI, and strengthen its ties with the U.S. government as it ramps up its defense tech. For Scale, partnering with Meta means gaining a powerful ally with deep pockets. For Mr. Wang, it would also be a perfect moment to close the loop on his destiny.

Shortly after Scale's founding, Mr. Wang revealed that a venture capitalist asked him when the idea for the company came to him. In response, he said he "made up a lame answer about being inspired by The Social Network," the movie that tells the story of Facebook's founding.

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https://www.bloomberg.com/news/articles/2025-06-08/meta-s-billion-dollar-bet-cements-scale-ai-s-role-as-backbone-of-ai-market?srnd=phx-technology