The artificial intelligence industry is undergoing a sudden realignment that may have been triggered by Meta’s recent $14.3 billion investment in Scale AI.
According to reports, Meta now holds a 49% non-voting stake in the data-labeling firm, and Scale’s founder, Alexandr Wang, is joining Meta to lead its “superintelligence” division.
These developments have reportedly shaken Scale AI’s core customer base — which includes companies like Google, Microsoft, OpenAI, and xAI — raising fears about data confidentiality and vendor neutrality. Analysts say the move could reshape the competitive landscape in AI, especially in the race to develop advanced models.
What had been a relatively stable data ecosystem is now in flux. The market is splitting between high-volume labeling vendors and expert-tier services built on trust and discretion. Neutrality, once a business advantage, is rapidly becoming a non-negotiable requirement.
Meta’s stake in Scale AI appears to be a calculated move to tighten control over a key layer of the AI development pipeline. The deal not only gives Meta strategic influence, but also brings in one of the industry’s top AI infrastructure leaders.
In June 2025, Meta announced it had invested $14.3 billion to acquire a 49% stake in Scale AI — a transaction that reportedly doubled Scale’s valuation from $14 billion to $29 billion. While the stake does not come with voting control, the move gives Meta significant operational alignment, including expanded commercial relationships between the two companies.
Alongside the deal, Scale CEO Alexandr Wang is joining Meta to lead its AI efforts. A few key employees are also said to be transitioning with him. Scale’s Chief Strategy Officer, Jason Droege, has stepped in as interim CEO.
Because Meta’s stake falls short of formal control, it avoided triggering antitrust reviews. However, the deal has attracted political attention. Senator Elizabeth Warren has publicly called for an investigation, suggesting the deal structure may have been designed to evade regulatory scrutiny while granting Meta disproportionate influence.
The investment is widely viewed as part of Meta’s push to catch up with rivals like OpenAI and Google, both of which have made significant advances in generative AI. After Llama 4 reportedly underwhelmed expectations earlier this year, securing Scale’s infrastructure — and its talent — may help Meta close the gap.

OpenAI has confirmed that it is reducing its work with Scale AI. According to Bloomberg, the decision was made before Meta’s investment and reflects OpenAI’s evolving data needs as it builds more sophisticated models.
The company began winding down its reliance on Scale AI over the past six to twelve months, seeking out alternative vendors better suited to its goals. One such partner is Mercor, which offers more specialized services for advanced AI post-training. OpenAI emphasized that its shift was strategic and already underway before Meta’s involvement.
Despite this, Reuters reports that internal concerns may have deepened once the Meta-Scale deal was announced. While OpenAI CFO Sarah Friar has stated publicly that the company still works with multiple data vendors, OpenAI’s relationship with Scale appears to be tapering off.
The situation highlights a larger trend: frontier AI labs are becoming more selective, seeking out data providers with tight security, expert labor, and clear independence from direct competitors.
Google Leads a Broader Client Exodus
According to reports, Google — Scale’s largest customer — is also ending its relationship with the company. The tech giant had reportedly planned to spend up to $200 million this year on Scale’s data-labeling services to support models like Gemini.
Sources familiar with the matter say Google has already begun shifting its contracts to other providers. While the company had been diversifying its vendor base for over a year, Meta’s sudden investment appears to have accelerated that process.
Microsoft and Elon Musk’s xAI are also reportedly backing away from Scale. Reuters sources say both companies are moving to reduce or exit their contracts, citing concerns over exposing proprietary data, research priorities, and technical details to a vendor partially owned by a direct rival.
This marks a major blow to Scale’s original business model, which relied on a small number of high-paying, high-risk clients. These companies often shared prototype models and internal tools with Scale’s annotators — making any perception of conflict unacceptable.
As one industry executive put it, “Neutrality is no longer optional. It’s essential.”
Scale’s Strategic Pivot
Facing pressure, Scale has begun repositioning itself. According to its public statements, the company remains committed to safeguarding customer data and has emphasized its compliance with leading security standards like SOC 2 and ISO 27001.
The company has declined to comment on the specifics of its relationship with Google, but says its work with governments and enterprise customers remains strong.
Interim CEO Jason Droege has signaled a pivot toward government and enterprise clients — markets that are less likely to view Meta’s involvement as a direct threat. Scale is also expanding beyond labeling, positioning itself as a provider of full-stack AI solutions for sectors like defense and finance.
Industry observers see this shift as a necessary move. With frontier AI labs now reluctant to work with a Meta-aligned vendor, Scale is focusing on segments where neutrality matters less — and integration with a tech giant might even be seen as a strength.
Conclusion: A Trust-Driven Reset
The Meta-Scale deal marks a decisive moment in the evolution of AI infrastructure. What once worked — a single vendor serving multiple competing labs — now appears unworkable. With Meta’s involvement, Scale lost the very thing that made it valuable to many: trust.
This has triggered a reset. Labs are turning to smaller, neutral vendors. Others are bringing data labeling in-house. Across the board, trust has become the new foundation of the AI supply chain.
Meta may still benefit from the deal, having secured both leadership and infrastructure to fuel its AGI ambitions. But Scale’s days as a shared industry utility appear to be over. A new era has begun — one where the safest partner, not just the smartest, defines the future of AI.