Alphabet’s Google, the largest customer of Scale AI, plans to cut ties with the company following news that rival Meta is taking a 49% stake in the AI data-labeling startup.
Scale AI provides human-labeled training data crucial for developing technology, including AI models like Gemini. Google had planned to pay $200 million this year for this data, but now seeks to shift away much of that workload due to the deal.
The loss of significant business comes as Meta values Scale AI at $29 billion, valuing it at a significantly higher price than its pre-deal worth of $14 billion. As a result, Scale’s core business is concentrated around a few customers, making it vulnerable if it loses key clients like Google.
Scale AI intends to maintain operations while CEO Alexandr Wang and some employees move over to Meta. The company has seen $870 million in revenue this year, with Google spending $150 million on its services last year.
Other major tech companies, including Microsoft, are also backing away from Scale’s services. Elon Musk’s xAI is looking to exit, and OpenAI decided to pull back months ago.
Scale AI provides data-labeling services for companies developing cutting-edge AI models, which can expose research priorities and roadmaps to rivals if they contract with the company. Rivals see openings in this market as Meta takes a stake, leading them to diversify their own data service providers.
The deal marks a turning point for Scale AI’s competitors, who are now focusing on filling the gap left by the loss of key customers.
Source: https://www.cnbc.com/2025/06/14/google-scale-ais-largest-customer-plans-split-after-meta-deal.html