Google to Cut Ties with Scale AI: Report

Meta Investment Sparks Client Concerns

Meta’s massive $14.3 billion investment in Scale AI appears to be causing hesitation among some of the data labeling company’s major customers. According to a Reuters report, Google plans to sever ties with Scale AI despite previously arranging to pay $200 million for services this year.

Tech Giants Reassessing Partnerships

Microsoft is reportedly following Google’s lead in reconsidering its relationship with Scale AI. OpenAI has already reduced its reliance on the company, though its CFO maintains they’ll continue working with Scale as one of multiple vendors.

While Scale AI serves autonomous vehicle developers and government agencies, its primary business comes from generative AI companies that need expert-labeled training data. The Meta deal represents a significant shift in Scale’s business model and ownership structure.

Official Responses Remain Vague

Google declined to comment specifically on the Reuters report. A Scale AI spokesperson avoided addressing the Google relationship directly but emphasized the company’s continued independence and strong business performance.

“Scale remains committed to operating as an independent company that protects customer data,” the spokesperson told TechCrunch.

The Meta Deal’s Major Implications

The reported $14.3 billion investment gives Meta a 49% stake in Scale AI and involves company CEO Alexandr Wang transitioning to lead Meta’s superintelligence development efforts. This strategic move appears to be triggering concerns among Scale’s other big tech clients about data privacy and competitive conflicts.

As the AI race intensifies, major players are carefully evaluating their partnerships and supply chains. Scale AI now faces the challenge of maintaining crucial enterprise relationships while integrating with Meta’s ambitious AI roadmap.