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Meta invests $15B in Scale AI to boost its Artificial Intelligence capabilities.
The deal positions Meta as a serious contender in Artificial General Intelligence.
Scale AI’s data expertise enhances Meta’s model training and accuracy.
Meta recently made one of its biggest moves in artificial intelligence (AI) by investing $15 billion into Scale AI. This bold decision places Meta firmly in the global race for artificial general intelligence (AGI). With this deal, Meta signals a strong intent to compete against companies like Microsoft, Google, and Amazon in the rapidly growing AI sector.
The move carries significant implications for Meta’s stock performance, business strategy, and future growth.
Meta purchased a 49% stake in Scale AI for almost $15 billion. This marks one of Meta’s largest external investments since its $19 billion WhatsApp acquisition in 2014. Scale AI, based in San Francisco, provides data-labeling and model-tuning services. It works with many major AI players, including OpenAI, Google, Microsoft, and several government agencies.
Scale AI’s revenue growth has been impressive. For 2025, the company expects to earn over $2 billion in revenue, more than double that of the previous year. This strong revenue growth shows how important Scale AI has become in the AI industry. It also explains why Meta views this partnership as a valuable opportunity to strengthen its own AI capabilities.
Meta’s investment in Scale AI shows its serious commitment to developing AGI. This advanced form of AI aims to replicate human-level intelligence and perform a wide range of tasks without human help.
Competitors have already made huge investments:
Microsoft invested around $13 billion in OpenAI.
Amazon committed $8 billion to Anthropic.
Google invested $3 billion in Anthropic.
With this new deal, Meta secures its position among the leaders in the AGI race. The company is forming a specialized AGI research team, led by Scale AI CEO Alexandr Wang. Around 50 top researchers will work together on cutting-edge AI models. This team aims to help Meta close the gap between itself and competitors who have moved ahead in developing large language models and other advanced AI systems.
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Before this deal, Meta faced several challenges in its AI development efforts. The company’s large language model, Llama 4, introduced a new model structure using a "mixture-of-experts" system. This allowed the model to process multiple types of data at once, including text and images. However, Llama 4’s performance still fell behind competitors like OpenAI’s GPT-4 and Google’s Gemini models.
Meta also struggled with delays in launching its flagship AI model called “Behemoth.” These setbacks highlighted the need for Meta to strengthen its AI research and development capabilities.
Additionally, some of Meta’s AI products received mixed reactions. Its standalone Meta AI app did not perform as strongly as expected, and the company faced criticism over benchmarking results. These challenges led Meta’s leadership to reorganize its AI teams and seek outside help, leading to the investment in Scale AI.
Scale AI brings unique expertise to Meta. The company focuses on high-quality data labeling, human-augmented training processes, and fine-tuning models with human feedback. These skills are critical for building large, accurate, and safe AI models that can handle complex tasks.
By partnering with Scale AI, Meta gains access to advanced data pipelines that help improve the performance of its AI models. Scale AI’s work across industries—including healthcare, defense, and finance—gives Meta opportunities to develop specialized AI systems for different sectors.
Scale AI has also expanded its partnerships with governments and private companies worldwide. These collaborations allow Meta to benefit from Scale AI’s growing network, which can open new business opportunities in highly regulated industries.
Meta’s $15 billion investment brings both risks and potential rewards for shareholders.
Valuation Risk: Such a large investment increases Meta’s financial exposure. Spending this amount on one company may strain Meta’s balance sheet. Some regulators may also raise antitrust concerns as Meta gains more power in the AI space.
Potential Earnings Growth: If the partnership succeeds, Meta could see significant gains. Access to Scale AI’s data and expertise could help Meta improve its AI models, leading to better products, new revenue streams, and stronger financial performance over time.
Competitive Advantage: The investment may help Meta catch up with competitors like Microsoft and Google. With Scale AI’s resources, Meta can build more advanced models faster and close the gap in model quality and safety.
While the deal brings many opportunities, Meta also faces several challenges:
Regulatory Scrutiny: Antitrust authorities may closely examine the deal as Meta increases its presence in both AI and social media.
Integration Risks: Combining Scale AI’s team and operations with Meta’s existing structure may not be smooth. Organizational differences could create internal conflicts.
Execution Pressure: Building AGI requires expertise in many fields. Meta must overcome technical challenges and ensure that teams work together effectively.
Opportunity Costs: Investing $15 billion in Scale AI means Meta has less capital available for other important areas, such as data centers, custom AI chips, and cloud infrastructure.
The stock market reacted sharply to news of the Scale AI deal. In the short term, Meta’s stock saw some volatility as investors tried to evaluate the risks and rewards of the large investment. Analysts offered mixed views, with some praising the long-term vision while others expressed concerns about financial strain and execution risks.
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If the partnership succeeds, Meta stands to gain significant long-term benefits:
Faster Development of AGI: With Scale AI’s help, Meta may bring new models like Behemoth to market sooner.
Improved AI Infrastructure: Scale AI’s high-quality data pipelines can strengthen Meta’s AI research and development efforts.
New Business Opportunities: Meta could apply AI solutions across healthcare, defense, finance, and enterprise services.
Higher Valuation: If Meta becomes a leader in AI, analysts may start valuing Meta more like Microsoft or Alphabet, raising its stock price over time.
Meta’s stock bounced to $702.40 at the close on June 10, 2025, after hitting an intraday high of approximately $703 and a low near $692. That rebound followed a modest dip earlier in the week, when shares dropped from around $697.71 to $694.06 (June 6–9), reflecting market uncertainty over the $15 billion Scale AI investment. In one moderate growth scenario, analysts believe that Scale AI could increase Meta’s earnings per share (EPS) by 5–10% over the next 3–5 years. Based on this, some price targets suggest Meta stock could rise above $400.
In a more optimistic scenario, where Meta’s AI efforts dominate the market, price targets could reach or exceed $500. However, if the company struggles with integration or faces regulatory blocks, the stock may remain between $300 and $350 for some time.
Risk Profile: Growth-focused investors may find Meta attractive for its AI potential. Cautious investors may prefer to wait for clearer signs of success.
Key Catalysts: Investors should watch for progress on Meta’s Behemoth model, Scale AI’s revenue growth, team expansions, and any regulatory decisions.
Comparison with Competitors: Meta’s direct ownership stake in Scale AI gives it an advantage over rivals who only have partnerships. However, Microsoft’s and Google’s early lead remains a serious challenge.
Meta’s massive bet on Scale AI marks a major shift in its business strategy. This investment aims to position Meta as not only a social media giant but also a serious player in the AI industry. Success depends on Meta’s ability to integrate Scale AI’s expertise, overcome technical hurdles, and develop world-class AI models.
If Meta executes well, the company could transform its business and see significant long-term stock gains. However, the risks remain real, and execution will be the key factor determining whether this bold investment delivers lasting returns.
