OpenAI Halts Collaboration with Scale AI Following Meta Deal

Published Date : 19/06/2025 

OpenAI is reportedly phasing out its partnership with data-labeling startup Scale AI due to Scale's new ties with Meta, a rival in the artificial intelligence (AI) development race. 

OpenAI is reportedly phasing out its involvement with data-labeling startup Scale AI due to Scale’s new ties to Meta, an OpenAI rival. Scale AI has been a key player in the AI development landscape, providing essential data-labeling services that help businesses train machine learning models. However, the recent partnership between Scale and Meta has raised concerns about data access and competitive advantages.

Scale provided only a small fraction of the data needed by OpenAI, and the companies’ relationship was already winding down over the past six to 12 months as OpenAI sought different sorts of data from other suppliers, Bloomberg reported, citing an OpenAI spokesperson. The OpenAI spokesperson’s confirmation of the move came days after Meta took a 49% stake in Scale and hired its founder, Alexandr Wang, to join Meta’s new “superintelligence” unit.

While Scale has provided data to both Meta and OpenAI, the deal raised concerns that Meta would be able to access information about rival companies’ AI development efforts. Scale announced in a June 12 press release that it received a “significant investment” from Meta, that the companies’ agreement will “substantially expand” their commercial relationship, and that Wang will join Meta while also continuing to serve as a director on Scale’s board of directors.

The company said in the release: “Scale remains an independent leader in AI, committed to providing industry-leading AI solutions and safeguarding customer data. Having played a pivotal role in accelerating AI development from its inception, Scale will continue to partner with leading AI labs, multinational enterprises, and governments to deliver expert data and technology solutions through every phase of AI’s evolution.”

It was reported on June 8 that Meta was weighing a multibillion-dollar investment in Scale that would be the company’s largest-ever outside expenditure on AI and a rare move for a company that has largely depended on internal research. Scale’s data labeling services have been a crucial beneficiary of the generative AI boom, helping businesses refine their machine learning models and improve AI performance.

It was reported that OpenAI CEO Sam Altman accused Meta of making “giant offers” of $100 million to poach OpenAI workers as Meta tries to catch up in the AI race. “I’ve heard that Meta thinks of us as their biggest competitor,” Altman said. This competitive tension underscores the high stakes in the AI development sector, where access to data and talent can significantly influence a company’s success.

Despite the challenges, both OpenAI and Scale AI continue to play significant roles in the AI landscape. OpenAI’s decision to phase out its partnership with Scale AI reflects a strategic shift to diversify its data sources and maintain its competitive edge. Meanwhile, Scale AI’s partnership with Meta signals a new direction for the company, with a focus on expanding its reach and capabilities in the AI market. 

Frequently Asked Questions (FAQS): 

Q: Why is OpenAI phasing out its partnership with Scale AI?

A: OpenAI is phasing out its partnership with Scale AI due to Scale’s new ties with Meta, an OpenAI rival. This decision is part of OpenAI's strategy to diversify its data sources and maintain its competitive edge.

Q: What is the significance of Meta's investment in Scale AI?

A: Meta's investment in Scale AI is significant because it represents a major move by Meta to expand its AI capabilities and access crucial data-labeling services. This investment also raises concerns about potential conflicts of interest and data access.

Q: How does Scale AI's data-labeling service help businesses?

A: Scale AI's data-labeling service helps businesses train machine learning models by providing high-quality, labeled data. This is essential for improving the accuracy and performance of AI systems.

Q: What does the future hold for Scale AI after its partnership with Meta?

A: After its partnership with Meta, Scale AI is expected to expand its commercial relationships and continue providing industry-leading AI solutions. The company remains committed to safeguarding customer data and partnering with leading AI labs and enterprises.

Q: What does OpenAI CEO Sam Altman think about Meta's competitive moves?

A: OpenAI CEO Sam Altman has accused Meta of making ‘giant offers’ to poach OpenAI workers, indicating that Meta sees OpenAI as a significant competitor in the AI development race. 

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