Meta Platforms (META) Reportedly Held Acquisition Talks with Perplexity AI
Meta Platforms (META) reportedly held acquisition talks with Perplexity AI, an artificial intelligence search startup, before ultimately deciding to invest heavily in another AI company, Scale AI. According to Bloomberg, the discussions between Meta and Perplexity did not result in a deal, and both companies walked away without pursuing the acquisition. Neither Meta nor Perplexity have commented publicly on the matter.
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Instead, Meta announced earlier this month that it would invest $14.3 billion in Scale AI, which allowed it to acquire a 49% stake in the company and value it at over $29 billion. As part of the deal, Scale's CEO Alexandr Wang will join Meta to lead its new 'superintelligence' division, which focuses on developing artificial general intelligence (AGI). For context, AGI refers to AI systems that can understand, learn, and apply knowledge across a wide range of tasks at a human-like level of intelligence. This move highlights Meta's shift toward building more advanced AI systems that go beyond narrow task-based models.
Founded in 2016, Scale AI helps train generative AI models by connecting them with a large network of human experts. Meta's significant investment in the company shows that CEO Mark Zuckerberg is determined to strengthen the company's position in the AI market. And Zuckerberg is not the only one, as many other tech giants have invested heavily in AI startups ever since Microsoft's blockbuster deal with OpenAI in 2023.
Is Meta a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on META stock based on 42 Buys, three Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average META price target of $707.16 per share implies that shares are almost fairly valued.
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