Scale AI Hits a Gusher!
And I need a new metaphor...
I’m definitely stretching this “data is the new oil” metaphor to its breaking point, but Scale recently announced it had secured $1 billion in funding in a deal that values the company at nearly $14 billion. According to its press release the list of investors in this Series F is impressive and indicative of the importance that annotated has to the future of AI in general and generative AI in particular. Investors include the chip maker NVIDIA, on whose chips most AI models run, and Meta, a customer of Scale’s annotation services. Capturing why Scale may be worth $14 billion, the press release continues:
As AI models evolve, the quality, quantity, and complexity of frontier data—the data needed to drive and ensure performance—increases exponentially. As the data foundry for AI, Scale powers the data behind the end-to-end AI lifecycle, ensuring model builders and enterprises alike have the data they need to deploy AI confidently.
Sadly for my oil metaphor, Scale is now describing itself as a “data foundry.”
DALL-E1
I’m not terribly surprised by this raise or valuation. Scale is clearly the leader / largest annotation vendor and has secured a $250 million contract with the US Department of Defense. Alexandr Wang, CEO and founder of Scale, testified before Congress in 2022 about the DoD’s lack of a data strategy:
The raise and valuation are also consistent with the growth in the overall annotation market. A recent report from G2 finds that
The global market for data labeling solutions and services was valued at $11.83 billion in 2022 and is projected to grow at a compound annual growth rate of 21.3% from 2023 to 2030.
This report, therefore, implies that the annotation market could be worth nearly $50 billion by 2030.
Here is the prompt I used to create this image:
Scale is fueling the Generative AI revolution. Built on a foundation of high-quality data and human insight, Scale’s proprietary Data Engine powers the world’s most advanced models. Our years of deep partnership with every major model builder enables us to provide the roadmap for any organization to apply AI. Scale is trusted by industry leaders, including Meta, Morgan Stanley, Microsoft, the U.S. Army, the DoD’s Defense Innovation Unit, OpenAI, General Motors, and Toyota Research Institute. Create an image of a data foundry.