• Scale AI raised $1 billion in one of the year’s largest deals
  • Startup helps tech firms improve data for building AI tools

Scale AI Inc., a startup that helps top tech companies improve the data used to build artificial intelligence products, has roughly doubled its valuation to $13.8 billion and is raising $1 billion in one of the largest financing deals of the year.

The funding round was led by existing Scale investor Accel with participation from a mix of new corporate backers, including Amazon.com Inc., Meta Platforms Inc. and the venture arms of Advanced Micro Devices Inc., ServiceNow Inc. and Intel Corp., the startup said Tuesday.

Founded in 2016, years before OpenAI’s ChatGPT brought artificial intelligence to the mainstream, Scale emerged as an early leader in the AI sector. The startup uses an army of contract workers to clean and label the vast amount of text, images and assorted data that’s needed to develop AI chatbots and other products. Scale also employs a technique called reinforcement learning from human feedback, which incorporates input from real people to refine the performance of AI systems.

Scale works with many of the largest AI companies, including OpenAI, Microsoft Corp. and Meta Platforms Inc. The startup also has contracts with the US government and is working with the Pentagon’s Chief Digital and Artificial Intelligence Office to develop a testing and evaluation framework for AI models used by the military.

“Our vision is one of data abundance, where we have the means of production to continue scaling frontier LLMs many more orders of magnitude,” Alexandr Wang, Scale’s founder and chief executive officer, said in the announcement. “We should not be data-constrained in getting to GPT-10,” he said.

Wang may not be a household name to the same degree as OpenAI’s Sam Altman, but he has gradually established himself as a key figure in the industry. He has testified before Congress about America’s risk of falling behind China in the AI race and serves as a connector of sorts between the defense and tech industries. Earlier this month, Wang traveled to Capitol Hill to speak at the Hill & Valley Forum, an event sponsored by a group of VCs including the Peter Thiel-backed Founders Fund, where Wang emphasized the importance of not underestimating China as a competitor to the US in AI.

Scale is positioning itself as a critical supplier of high-quality data at a time when artificial intelligence developers — which have already scraped the internet for images, text and other information — are grappling with the prospect of running out of it to train their models. In a blog post, Scale said it plans to use the fresh capital to provide the “data that will pave the road for AGI,” referring to artificial general intelligence, a powerful form of AI that doesn’t yet exist.

While many other AI startups were swept up in a funding frenzy over the past 18 months following the launch of ChatGPT, Scale was slower to jump into the fray, quietly building its roster of corporate customers. The San Francisco-based company was previously valued at $7.3 billion in a funding round in 2021.

The Information earlier reported Scale AI was in fundraising talks.

Written by:  @Bloomberg

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