Google Plans to Sever Ties With Scale AI Amid Meta Investment
Google reportedly intends to end its $200 million relationship with Scale AI and is actively talking to competing data annotation firms. The move follows Meta's massive $14.3 billion investment in the startup, which also causes Microsoft and OpenAI to reconsider their partnerships.
Google plans to cut ties with Scale AI despite an initial agreement to pay the startup $200 million this year. According to Reuters, Google is currently having conversations with Scale AI's competitors as it prepares to sever the business relationship. This shift in strategy follows Meta's massive $14.3 billion investment in Scale AI, which gives the social media giant a 49% stake in the data annotation company.
Other major tech companies are also reportedly pulling back from Scale AI in the wake of Meta's investment. Microsoft is looking to reduce its reliance on the startup, and OpenAI supposedly makes a similar decision months ago, though its CFO states the company still works with Scale AI as one of many vendors. These generative AI companies typically rely on Scale AI to provide workers with specialized knowledge who annotate data to train complex models.
While Google declines to comment on the report, a Scale AI spokesperson insists the startup's business remains strong. The spokesperson tells TechCrunch that Scale AI continues to operate as an independent company that safeguards its customers' data. Meanwhile, Scale AI CEO Alexandr Wang joins Meta to lead the tech giant's efforts to develop artificial superintelligence.