OpenAI Stops Working with Scale AI After Meta Invests Billions and Hires Its CEO

OpenAI, the company behind ChatGPT, has decided to end its partnership with Scale AI, a startup that helps label data for artificial intelligence. This comes just days after Meta (the company that owns Facebook and WhatsApp) invested billions of dollars in Scale AI and hired its co-founder and some employees.

Why OpenAI Is Moving Away from Scale AI

Even though OpenAI has worked with Scale AI in the past, the company was already planning to rely less on them before Meta’s big investment. OpenAI is now looking for other companies that can provide more specialized data to help train its advanced AI models.

At first, OpenAI said it would keep working with Scale AI as one of its many data providers. But now, it seems the partnership is ending completely.

Meta’s Huge Investment in Scale AI

Meta recently invested $14.3 billion in Scale AI, taking a 49% stake in the company. As part of the deal, Scale AI’s CEO and co-founder, Alexandr Wang, along with some employees, will join Meta to help with its AI projects.

Before this deal, Scale AI was already valued at nearly $14 billion after investments from big tech companies like Nvidia, Amazon, and Meta. Now, with Meta’s latest investment, Scale AI’s value has jumped to $29 billion.

Why Other AI Companies Are Worried

Many experts warned that Meta’s investment could cause problems for Scale AI. Since Meta is a major competitor in AI, other companies (like OpenAI and Google) might not want to keep working with Scale AI if they think Meta could gain access to their private data and research.

When companies use Scale AI’s services, they often share confidential information about their AI projects. Now that Meta owns nearly half of Scale AI, rivals like OpenAI and Google worry that Meta could learn about their AI strategies.

Google Also Plans to Leave Scale AI

Google, which was Scale AI’s biggest customer, recently announced it would stop working with them. Google had planned to pay Scale AI $200 million this year for data-labeling services to improve its AI models, including Gemini (its competitor to ChatGPT).

Reports say that Scale AI made $870 million in revenue in 2024, mostly thanks to Google’s $150 million in contracts. Now, with both OpenAI and Google leaving, other big tech companies like Elon Musk’s xAI and Microsoft might also stop using Scale AI’s services.

What This Means for Scale AI

While Meta’s investment is a big win for Scale AI’s CEO, Alexandr Wang, it could hurt the company’s reputation with other tech giants. Wang, who is known as one of Silicon Valley’s top entrepreneurs, has worked closely with OpenAI’s CEO, Sam Altman, and even the U.S. government.

In a message to employees, Wang said:
“As you’ve probably seen in the news, big opportunities like this come with sacrifices. For me, that means leaving Scale AI. It has been the greatest honor of my life to lead this company.”

Scale AI Says Business Is Still Strong

Despite the challenges, a Scale AI spokesperson said the company is still doing well. They work with many big companies and governments and promise to keep customer data safe.

But with OpenAI, Google, and possibly others leaving, the future of Scale AI’s partnerships remains uncertain.

The Bigger Picture: AI Competition Heats Up

This situation shows how intense the competition is in the AI industry. Big companies like Meta, Google, OpenAI, and Microsoft are all racing to build the best AI models and they don’t want their rivals to get an advantage.

For now, Meta’s investment in Scale AI gives it a boost, but it may have cost Scale AI some of its biggest customers.