Meta Platforms Inc. is in advanced negotiations to invest more than $10 billion in Scale AI, a U.S.-based artificial intelligence data infrastructure startup, in what could become one of the largest private funding rounds in the history of the tech industry, according to people familiar with the matter.
While final terms have not been confirmed and could still change, the proposed financing would mark Meta’s largest external AI investment to date, representing a strategic shift in the company’s artificial intelligence roadmap.
Meta, which has traditionally relied on in-house AI development and open-source models, is now expanding its external engagements to strengthen its position in the increasingly competitive AI landscape.
Scale AI, co-founded in 2016 by CEO Alexandr Wang, specializes in data annotation and labeling services that enable machine learning models to be trained efficiently and at scale.
The company supports clients such as OpenAI and Microsoft Corp. and has emerged as a key player in the generative AI ecosystem. Scale was last valued at approximately $14 billion in 2024 with Bloomberg reporting earlier this year that a new tender offer could raise that figure to $25 billion.
The current talks signal Meta’s deepening commitment to AI infrastructure and military-grade model development. Both Meta and Scale declined to comment on the ongoing negotiations.
If concluded, the deal would place Meta among the largest backers of AI startups, alongside Microsoft’s $13 billion investment in OpenAI and Amazon’s multibillion-dollar funding in Anthropic.
Unlike its peers, however, Meta lacks a commercial cloud platform, which raises questions about how the investment will be structured. Past large-scale AI investments by competitors have been a mix of equity and cloud credits.
CEO Mark Zuckerberg has identified artificial intelligence as Meta’s top investment priority, stating in January that the company would allocate up to $65 billion toward AI initiatives in 2025.
The company’s broader strategy includes expanding usage of its Llama large language model across Facebook, Instagram and WhatsApp, where its AI assistant currently serves over 1 billion users monthly.
Scale AI is also positioned at the intersection of commercial and defense AI. The startup reported $870 million in revenue in 2024 and expects to more than double that to $2 billion in 2025, according to internal estimates.
The company is already working with the U.S. Department of Defense on advanced AI agent systems and recently secured a major contract to deliver defense-grade AI capabilities.
In a significant joint initiative, Meta and Scale are collaborating on “Defense Llama” — a military-focused adaptation of Meta’s Llama model tailored for U.S. government use.
Meta has also formed a partnership with Anduril Industries to develop virtual and augmented reality tools for defense applications, including AI-powered helmets.
The convergence of Meta’s LLM ambitions with Scale’s government-facing capabilities underscores the strategic alignment between both firms. As geopolitical concerns elevate the role of AI in national security, partnerships such as this are expected to define the next phase of AI commercialization and defense integration.
Analysts say Meta’s potential investment in Scale AI is both a catch-up strategy and a diversification move.
“Meta is recognizing the need to accelerate beyond internal development and place strategic bets externally, especially where data infrastructure and defense adoption converge,” said one industry expert.
If finalized, the transaction would cement Scale AI’s status as one of the most valuable generative AI infrastructure firms globally and offer Meta a critical foothold in defense AI, data supply chains and model training operations.
