The company is reeling after the $14 billion bombshell from Meta.

Many rumors suggest that Meta invested in Scale AI solely to recruit a CEO. Photo: Inc.

This summer, Meta invested $14 billion in the labeling company ScaleAI and recruited its 28-year-old founder, Alexandr Wang. Following this move, top clients like OpenAI and Google simultaneously ceased their collaborations with the startup.

Scale AI had been lauded as one of the fastest-growing startups in the tech industry until then. However, that glory has recently begun to fade as investors aggressively lowered its valuation, employees are dissatisfied with their salaries, and competitors are vying for customers.

The forgotten labeling team

Scale AI relies on nearly 10,000 taskers who classify data to train the chatbot. However, taskers' salaries have recently been cut. According to Business Insider, more and more people are leaving the platform due to reduced pay, lengthy training, and limited involvement in new projects.

One tasker said they spent nearly 40 hours a month on unpaid onboarding training but still didn't get any actual work. Elizabeth Boyd, another tasker, barely worked for Outlier, a subsidiary of Scale AI, when wages dropped from $50 to around $20 an hour.

Another job advertised $20 an hour but actually only allowed 3 minutes of work every two days, equivalent to a pay of $0.99 .

Joe Osborne, a spokesperson for Scale AI, stated that the financial balance sheet indicates the company is on the right track. He also noted that the number of active users on Outlier has increased since the Meta acquisition, and contributors always see the upfront payment and have the right to decline any work.

Scale AI was once valued at up to $14 billion in 2024. Photo: Reuters.

Scale AI is also looking to diversify its revenue streams. The startup has announced a new lab to meet the booming demand for robot training data. They've also strengthened their partnerships with the U.S. military and other government agencies, securing defense contracts worth up to $199 million since their agreement with Meta.

Investors are divided into two camps: some remain optimistic about Scale AI, while others believe Meta's investment has devalued Scale AI in the private market. Noel Moldvai, CEO of Augment, said his platform had processed millions of dollars worth of Scale AI stock transactions before the Meta deal, but things stalled as sellers waited to see if the startup would recover.

He said activity is picking up again, but at lower valuations. “It seems Meta is only targeting Alexandr Wang, and this is probably the structure that will help them acquire him,” Moldvai said.

Lack of jobs for employees

Just weeks after Meta's investment, a large-scale layoff occurred, resulting in the dismissal of 14% of Scale AI's 1,400 full-time employees. Osborne stated that the layoffs were aimed at making the data division profitable, and that this goal was achieved.

In September, Scale AI terminated contracts with 12 collaborators on its red team, the team that tests and debugs chatbots, citing poor performance. Two former red team members told Business Insider that the team's workload had gradually decreased since the Meta acquisition.

Scale AI has cut 14% of its workforce over the past year. Photo: Reuters.

They attributed the layoffs to a lack of work. Later that month, Scale AI closed a Dallas team of associates specializing in general AI, as the company shifted its focus to more specialized areas.

Meanwhile, a host of AI training startups have quickly swooped in to poach Scale AI's staff and customers. Mercor says it has secured at least one major AI training project from Meta, the 49% shareholder of Scale AI.

Tammy Hartline, who managed consulting projects for Scale AI until summer 2025, said the company paid low wages and had data quality issues. “Spam and poor-quality data had become accepted as part of the cost of doing business,” she said, before joining Mercor in September.

Scale AI also faced numerous security issues even before receiving the investment. According to Business Insider, the company regularly used publicly available Google Docs to track work for major clients such as Google, Meta, and xAI.

These issues are not uncommon in the AI training field. The company recently agreed to settle several lawsuits filed by former employees in California. Its tarnished reputation and strained relationships with many former employees are also partly affecting Scale AI's ability to recover.

Source: https://znews.vn/cong-ty-dieu-dung-sau-bom-tan-14-ty-usd-tu-meta-post1610546.html