Google Bails on Scale AI After Meta Takes 49% Stake

Google, which has been Scale’s biggest customer, is preparing to move most of its data-labeling work elsewhere.

Sources told Reuters that Google was set to spend around $200 million on Scale’s services but has already begun speaking with other providers to take over the work.

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Google is not alone in reconsidering its partnership with Scale. Microsoft is also scaling back, and Elon Musk’s company, xAI, is reportedly exploring a possible exit. OpenAI had already begun to pull away months earlier, although its spending was relatively small.

Many of these companies are concerned that working with Scale could expose their confidential data to risk. Since Scale labels data used to train AI models, it often handles sensitive materials, such as early-stage tools or internal research.

With Meta involved, other AI developers are concerned that their plans could be exposed to a direct competitor.

Scale AI stated that the company remains committed to protecting customer data and continues to work with a wide range of organizations, including governments and other private companies. The company generated $870 million in revenue in 2024, with Google contributing an estimated $150 million.

Meanwhile, Meta recently partnered with defense company Anduril to develop mixed-reality goggles powered by AI. How do these headsets work? Read the full story.