Meta bets big on start-up AI Scale and hires its co-founder
Meta is making a $14.3 billion (€12.4 billion) investment in artificial intelligence (AI) company Scale and recruiting its CEO Alexandr Wang to join a team developing "superintelligence" at the tech giant.
The deal announced Thursday reflects a push by Meta CEO Mark Zuckerberg to revive AI efforts at the parent company of Facebook and Instagram as it faces tough competition from rivals such as Google and OpenAI.
Meta announced what it called a "strategic partnership and investment" with Scale late Thursday. Scale said the $14.3 billion investment puts its market value at over $29 billion (€25 billion).
Scale said it will remain an independent company, but the agreement will "substantially expand Scale and Meta's commercial relationship". Meta will hold a 49 per cent stake in the start-up.
Wang, though leaving for Meta with a small group of other Scale employees, will remain on Scale's board of directors.
Replacing him is a new interim Scale CEO Jason Droege, who was previously the company's chief strategy officer and had past executive roles at Uber Eats and Axon.
Zuckerberg's increasing focus on the abstract idea of "superintelligence" - which rival companies call artificial general intelligence, or AGI - is the latest pivot for a tech leader who in 2021 went all-in on the idea of the metaverse, changing the company's name and investing billions into advancing virtual reality and related technology.
It won't be the first time since ChatGPT's 2022 debut sparked an AI arms race that a big tech company has gobbled up talent and products at innovative AI startups without formally acquiring them.
Microsoft hired key staff from startup Inflection AI, including co-founder and CEO Mustafa Suleyman, who now runs Microsoft's AI division.
Google pulled in the leaders of AI chatbot company Character.AI, while Amazon made a deal with San Francisco-based Adept that sent its CEO and key employees to the e-commerce giant. Amazon also got a license to Adept's AI systems and datasets.
Wang was a 19-year-old student at the Massachusetts Institute of Technology (MIT) when he and co-founder Lucy Guo started Scale in 2016.
They won influential backing that summer from the startup incubator Y Combinator, which was led at the time by Sam Altman, now the CEO of OpenAI.
Wang dropped out of MIT, following a trajectory similar to that of Zuckerberg, who quit Harvard University to start Facebook more than a decade earlier.
Scale's pitch was to supply the human labour needed to improve AI systems, hiring workers to draw boxes around a pedestrian or a dog in a street photo so that self-driving cars could better predict what's in front of them.
General Motors and Toyota have been among Scale's customers.
What Scale offered to AI developers was a more tailored version of Amazon's Mechanical Turk, which had long been a go-to service for matching freelance workers with temporary online jobs.
More recently, the growing commercialisation of AI large language models - the technology behind OpenAI's ChatGPT, Google's Gemini, and Meta's Llama - brought a new market for Scale's annotation teams.
The company claims to service "every leading large language model," including those from Anthropic, OpenAI, Meta, and Microsoft, by helping to fine-tune their training data and test their performance.
It's not clear what the Meta deal will mean for Scale's other customers.
Wang has also sought to build close relationships with the U.S. government, winning military contracts to supply AI tools to the Pentagon and attending President Donald Trump's inauguration.
The head of Trump's science and technology office, Michael Kratsios, was an executive at Scale for the four years between Trump's first and second terms. Meta has also begun providing AI services to the federal government.
Meta has taken a different approach to AI than many of its rivals, releasing its flagship Llama system for free as an open weight product that enables people to use and modify some of its key components.
Meta says more than a billion people use its AI products each month, but it's also widely seen as lagging behind competitors such as OpenAI and Google in encouraging consumer use of large language models, also known as LLMs.
It hasn't yet released its purportedly most advanced model, Llama 4 Behemoth, despite previewing it in April as "one of the smartest LLMs in the world and our most powerful yet".
Meta's chief AI scientist Yann LeCun, who in 2019 was a winner of computer science's top prize for his pioneering AI work, has expressed scepticism about the tech industry's current focus on LLMs.
"How do we build AI systems that understand the physical world, that have persistent memory, that can reason and can plan?" LeCun asked at a French tech conference last year.
These are all characteristics of intelligent behaviour that large language models "basically cannot do, or they can only do them in a very superficial, approximate way," LeCun said.
Instead, he emphasised Meta's interest in "tracing a path towards human-level AI systems, or perhaps even superhuman".
When he returned to France's annual VivaTech conference again on Wednesday, LeCun dodged a question about the pending Scale deal but said his AI research team's plan has "always been to reach human intelligence and go beyond it".
"It's just that now we have a clearer vision for how to accomplish this," he said.
LeCun co-founded Meta's AI research division more than a decade ago with Rob Fergus, a fellow professor at New York University. Fergus later left for Google but returned to Meta last month after a 5-year absence to run the research lab, replacing longtime director Joelle Pineau.
Fergus wrote on LinkedIn last month that Meta's commitment to long-term AI research "remains unwavering" and described the work as "building human-level experiences that transform the way we interact with technology".
Several Tesla customers in France are suing the electric vehicle (EV) maker run by Elon Musk, alleging that the cars have become 'extreme right' symbols that are harming their reputation, the law firm representing them said this week.
Around 10 Tesla leaseholders are asking to terminate their contracts and recover legal costs at the Paris Commercial Court, saying that the cars turned into 'far-right totems' following Musk's support for Donald Trump's presidential bid and Germany's far-right AfD Party.
"Because of Elon Musk's actions... Tesla-branded vehicles have become strong political symbols and now appear to be veritable extreme-right 'totems,' to the dismay of those who acquired them with the sole aim of possessing an innovative and ecological vehicle," the GKA law firm said in a statement cited by French media.
The statement also referenced when the billionaire sparked outrage when he took to the stage and appeared to perform a salute affiliated with Nazis. Musk denied the gesture was a Nazi salute and described criticism as a 'tired' attack.
The plaintiffs said that his actions now meant they are prevented 'from fully enjoying their car'.
Tesla offers the option to lease a car and later buy it, or opt out of the lease.
Owning a Tesla was once a symbol of status, but the vehicles in Europe and the United States have been targeted and defaced by vandals.
Some Tesla owners have reportedly been putting stickers on their cars reading "I bought this before Elon went crazy".
Sales of the vehicle have also plummeted since Musk entered politics.
Until last week, Trump and Musk were seemingly close allies, with Musk having supported Trump both financially and publicly during his 2024 presidential campaign.
Musk was also involved in the so-called Department of Government Efficiency (DOGE), a drive by Trump's administration to slash government programmes.
However, the richest and the most powerful men's relationship came to blows very publicly after Trump's 'big beautiful bill,' which aims to fast-track policy around spending.
It has hundreds of proposed changes that would impact health care and other changes to social benefits.
Musk argued the bill's spending would increase the "already gigantic budget deficit" and "burden American citizens with crushingly unsustainable debt".
Trump said that Musk knew about his plans for the bill but only opposed it when he learned it would impact Tesla.
Musk has now backpedalled on comments he made on his social media platform X that Trump should be impeached and that the president is mentioned in the sex offender Jeffrey Epstein's files.
Euronews Next has contacted Tesla but did not receive a reply at the time of publication.
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