Google Ends Partnership with Scale AI After Meta’s Major Investment

Google and Scale AI began their collaboration in 2023, with Google relying on Scale AI for high-quality, human-labeled data to train its advanced AI models, including Gemini. In 2023, Google spent about $150 million with Scale AI, and had planned to spend around $200 million in 2025 for continued data-labeling services.

What Happened?

In June 2025, Google announced it would end its partnership with Scale AI. This decision came after Meta (the parent company of Facebook) acquired a significant 49% stake in Scale AI, nearly half of the company. This investment raised concerns for Google and other tech giants about data privacy and the risk of exposing their confidential information to a direct competitor, since Meta would now have significant influence over Scale AI’s operations.

Reasons for Ending the Collaboration

• Data Security Concerns: With Meta’s large ownership, Google feared that its proprietary data used for AI training could be accessed by a major rival.
• Loss of Vendor Neutrality: The deal undermined Scale AI’s perceived neutrality as a third-party provider, making other clients wary.
• Industry Reactions: Other major clients, including Microsoft and Elon Musk’s xAI, are also reconsidering or ending their relationships with Scale AI for similar reasons.

Impact on Scale AI and the Industry

• Financial Impact: Scale AI’s valuation jumped from $14 billion to $29 billion after Meta’s investment. The company reported $870 million in revenue in 2024, much of it from major AI firms like Google.
• Leadership Changes: Scale AI’s CEO, Alexandr Wang, is reportedly moving to Meta to lead its AI efforts, further intensifying concerns among former clients.
• Shift to Alternatives: Competitors like Labelbox, Handshake, and Turing are seeing increased demand as companies seek alternative data-labeling providers. Some AI labs are also considering building in-house teams for greater control.

Google’s decision to end its partnership with Scale AI, a relationship that began in 2023, highlights the growing importance of data privacy and vendor neutrality in the AI industry. The move is expected to benefit Scale AI’s competitors and accelerate the trend toward in-house data-labeling solutions among major tech firms.