Google will abandon Scale AI's services after investments in the project from Meta.
Microsoft, OpenAI, and xAI are also looking for alternatives to this startup.
Project clients fear data leaks due to Meta's stake in Scale.
Google is severing ties with Scale AI, a data annotation startup, after Meta acquired 49% of its shares. Google planned to spend around $200 million on the company's services in 2024, but is now seeking alternative contractors.
Microsoft, OpenAI, and xAI are also refusing to collaborate with the company due to concerns about potential information leaks to a competitor. Mark Zuckerberg's corporation is perceived by the mentioned companies as one of the main competitors in the AI field.
Under the terms of the deal, the tech giant will pay $14.3 billion for a stake in Scale AI. At the same time, the startup's valuation reached $29 billion, which doubled its valuation from the previous year, analysts noted.
Additionally, Scale AI's CEO Alexander Wang moved to Meta and is leading the development of so-called superintelligence — Artificial General Intelligence (AGI). This concentration of influence has raised concerns among competitors who previously shared confidential prototypes and their own datasets with the company, experts emphasized.
In 2024, Google spent around $150 million on the startup's services, while the startup's total revenue was $870 million. Scale AI's core business is working with generative AI model manufacturers who need trained specialists for annotating complex datasets. Some annotations cost up to $100 per unit.
The loss of major clients forces Scale to 'defend itself'. The company allegedly stated that the business remains stable and will continue to work with other corporations and governments. However, intensified competition from projects like Labelbox, Handshake, and Turing may redistribute the market, some analysts believe.
Meta's deal with Scale AI has prompted AI developers to create their own annotation teams to mitigate risks, the report says. Additionally, experts claim that data provider neutrality is now becoming a mandatory standard for the industry.
