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May 25, 2024
Amazon and Meta lead $1 billion investment in artificial intelligence company, valuing it at $14 billion
Amazon and Meta have taken a significant step forward in artificial intelligence industry by leading a $1 billion investment round in Scale AI, a technology company now valued at $13.8 billion. This Series F funding round nearly doubles the company’s previous valuation, underscoring the growing importance and potential of AI technologies.
Founded in 2016 and based in San Francisco, Scale AI has secured a total of $1.6 billion in funding to date. The latest round saw participation from new investors including Cisco Investments, DFJ Growth, Intel Capital, ServiceNow Ventures, AMD Ventures, WCM and well-known individual investor Elad Gil. Existing backers such as Y Combinator, Index Ventures, Founders Fund, Coatue, Thrive Capital, Spark Capital, Nvidia, Tiger Global Management, Greenoaks and Wellington Management also joined the funding round.
Scale of artificial intelligence specializes in providing data labeling services essential for training AI models. This data can include text, images, video and audio, which is meticulously labeled to ensure that AI systems can interpret and use it effectively. Initially focused on data for autonomous driving, Scale AI has expanded its services to improve and refine data for a wide range of organizations looking to implement AI solutions.
CEO and founder Alexandr Wang highlighted the company’s mission, saying: “Our goal is to create the essential data foundation for artificial intelligence. With this funding, we are advancing to a new phase, increasing the availability of critical data that will lead us to achieve results artificial general intelligence (AGI).”
The company’s influence extends beyond the private sector, increasingly partnering with government entities. In August, Scale AI was awarded a contract with the Department of Defense’s Chief Office of Digital and Artificial Intelligence. This partnership aims to improve the artificial intelligence capabilities of various military branches, including the Army, Marine Corps, Navy, Air Force, Space Force and Coast Guard.
In a notable achievement, Scale AI launched Donovan in May, an AI-driven decision-making platform and the first large language model deployed on a classified U.S. government network. This development marks a significant milestone in the company’s efforts to support national security through advanced AI technologies.
Wang, speaking at the AI Insight Forum in Washington, DC last December, highlighted the strategic importance of AI adoption for the United States. “The race for global leadership in artificial intelligence is in full swing. Our nation’s ability to effectively adopt and deploy artificial intelligence will determine the future of warfare. I am confident that the United States can lead the world in artificial intelligence to support national security. The pace of innovation is rapid and we need to be proactive,” he said.
On the international front, Scale AI expands its presence. In May, the company announced plans to open an office in London, which will serve as its European headquarters. This move is part of a broader strategy to collaborate with the UK government on various AI initiatives.
This latest funding round not only marks one of the largest funding deals of the year, but also highlights Scale AI’s growing impact on the artificial intelligence industry. The company’s meticulous approach to building a strong customer base and improving the quality of AI data has set it apart, allowing it to attract significant investment even as the AI field becomes increasingly competitive.
Previously valued at $7.3 billion in 2021, Scale AI’s steady growth reflects its methodical strategy. Unlike many startups that have rushed to secure funding in the wake of the AI boom triggered by the popularity of tools like ChatGPT, Scale AI has been focused on building a strong foundation and acquiring high-profile customers. The company provides data to power some of the industry’s leading AI models, partnering with big names like OpenAI, Microsoft, and Meta.