OpenAI and Google will reportedly drop data provider Scale AI after Meta's investment in the company

Last week, news broke that data provider Scale AI had received a substantial investment from Meta, and that Scale AI CEO Alexandr Wang would be joining Meta to work on the company's AI efforts (Wang remains director on the Scale Board of Directors). In addition to stating this, Scale's official announcement mentioned that the investment placed Scale at a $29 billion post-money valuation, that the company had named its Chief Strategy Officer, Jason Droege, as interim CEO, and that Scale would remain "an independent leader in AI".

Since Scale's official announcement, details emerged confirming that Meta had made a $14.3 billion investment for 49% of the company, in what effectively seems to be a partial acquisition. Since Meta now holds a nonvoting stake in the company, the transaction does not qualify for review by antitrust authorities. Regardless, a review could be triggered if regulators find reasons to think the deal was specifically tailored to avoid review or harm competition.

Since news of the investment emerged, Scale has emphasized more than once that it remains an independent entity committed to safeguarding its customers' data. Apparently, this has not been sufficient for some big names in the industry, as it was quickly reported that the likes of Google and OpenAI were looking to source their data elsewhere.

OpenAI was the first to publicly comment on the matter, and while it initially seemed that the company was open to continuing its partnership with Scale AI, OpenAI recanted days later, saying that it is phasing out its work with Scale which only accounted for a small fraction of its data needs, since the company started scaling down on the data it acquires from Scale months before the transaction. Shortly after OpenAI first commented on their relationship with Scale, Reuters reported that Google had planned to $200 million on Scale's services, but was now looking to take its business to competitor firms.