Potential Deal Would Mark Zuckerberg’s Largest External AI Bet Amid Intensifying Tech Arms Race
- Meta Platforms is negotiating what could become its most significant external artificial intelligence investment—a multi-billion dollar stake in data infrastructure provider Scale AI—according to Bloomberg sources familiar with the matter. The discussions highlight the intensifying global competition for AI dominance among tech giants.
The Proposed Transaction
Key Details
- Investment size potentially exceeding $10B
- Would surpass Meta’s cumulative external AI investments
- Terms remain fluid with possible structural changes
Strategic Rationale
- Strengthens Meta’s access to high-quality training data
- Deepens defense sector collaboration (“Defense Llama” program)
- Complements $65B internal AI budget for 2025
Scale AI’s Meteoric Rise
Business Model
- Provides data labeling/curation for AI development
- Clients include OpenAI, Microsoft, Nvidia, Pentagon
- 2024 revenue: $870M (2025 projection: $2B)
Valuation Trajectory
| Date | Round | Valuation | Notable Investors |
| May 2024 | Series F | $13.8B | Nvidia, Amazon, Meta, Intel |
| March 2025 | Tender | $25B (est) | Seeking secondary market buyers |
The AI Arms Race Context
Major Tech Investments
- Microsoft: $13B+ in OpenAI
- Amazon/Google: Billions in Anthropic
- Meta: $65B 2025 AI budget (Llama 4 development)
Market Dynamics
- Global private AI investment hit $252.3B in 2024
- US accounts for 72% of funding ($109.1B)
- Military applications becoming key battleground
Defense Sector Implications
Scale AI’s Pentagon contracts—including recently announced AI development work—position Meta to participate in:
- Classified data processing
- Military LLM applications
- National security infrastructure
Stanford’s 2025 AI Index Report notes this reflects broader trend of “dual-use” AI systems bridging commercial and defense applications.
Industry Impact
Potential Consequences
- Data moat strengthening: Meta could gain advantage in training quality
- Regulatory scrutiny: Defense ties may attract government attention
- Vendor consolidation: Pressure on smaller data labeling firms
As one Silicon Valley investor noted: “In the AI gold rush, Scale AI sells the picks and shovels. This deal would give Meta control over critical infrastructure.”
The negotiations come as Meta prepares to launch its Llama 4 model and AI assistant to over 1 billion users—initiatives that would benefit dramatically from Scale’s data capabilities. A final agreement could emerge within weeks.
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