Meta’s $14.3 billion investment for a 49% stake in the AI startup Scale AI is raising eyebrows for its unconventional structure.
According to Scale, the deal values the company at over $29 billion and will “distribute” proceeds to shareholders and vested equity holders (aka employees), granting them “substantial liquidity” while allowing them to retain ownership stakes.
Meta is also bringing on Scale’s high-profile founder and CEO Alexandr Wang, who famously left MIT at age 19 to start the company, known for providing AI training data validated by humans.
While it may appear that Meta is buying out existing shareholders, that’s not the case, sources told Bloomberg. TechCrunch confirmed that investors are instead receiving dividends. For example, early backer Accel is reportedly in line for a $2.5 billion payout, Bloomberg said. (Accel declined to comment.)
Scale, backed by numerous investors including Amazon and Meta, was last valued at $14 billion following a $1 billion Series F round last year. The massive dividend distribution accompanying this deal makes it resemble a full acquisition—something that could draw regulatory scrutiny.
Meta’s investment comes with a notable leadership shift. Wang is stepping down as CEO and joining Meta to contribute to its superintelligence AI initiatives. In a memo to employees posted on X, Wang said, “As you’ve probably gathered from recent news, opportunities of this magnitude often come at a cost. In this instance, that cost is my departure. It has been the absolute greatest pleasure of my life to serve as your CEO.”
Wang added that he will remain involved with Scale as a director, “continuing to support Scale’s mission and long-term vision.” Strategy chief Jason Droege will take over as CEO. Droege previously served as a VP at Uber and was a venture partner at Benchmark.
A small group of Scale employees will also move to Meta under the terms of the deal.
A Meta spokesperson confirmed the “strategic partnership and investment in Scale AI,” stating, “As part of this, we will deepen the work we do together producing data for AI models and Alexandr Wang will join Meta to work on our superintelligence efforts. We will share more about this effort and the great people joining this team in the coming weeks.”
Meta’s big swing on Wang fits into CEO Mark Zuckerberg’s push to advance Meta’s AI strategy, especially amid growing competition from OpenAI and Alphabet’s Google. Despite traditionally favoring internal promotions for senior roles, Zuckerberg reportedly chose Wang to lead Meta’s key AI efforts following underwhelming feedback on its recent Llama model rollout, according to CNBC.
While Scale serves many of Meta’s top rivals—including Google, Microsoft, and OpenAI—a Scale spokesperson emphasized that Meta’s investment will not impact the startup’s relationships with customers. Meta will not gain access to business information or data from Scale.
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