In a surprising twist for one of the most influential companies in artificial intelligence, Scale AI has laid off 200 employees—just weeks after receiving a massive investment from Meta. The decision follows a period of turbulence and transformation that has shaken up its workforce and business model.
A Sudden Shift After a $14.3B Boost
Scale AI recently secured a staggering $14.3 billion investment from Meta. However, the funding came with strings attached. Along with the capital, Meta acquired a 49% stake in the company and hired away Scale AI’s CEO, Alexandr Wang, who has since joined Meta’s superintelligence division.
According to an internal memo obtained by Bloomberg, interim CEO Jason Droege explained that the company’s rapid growth led to “bureaucracy and confusion” about its direction. The memo pointed to a misalignment between business operations and actual demand, prompting the layoffs.
In addition to letting go of 14% of its full-time staff, Scale AI will also terminate contracts with 500 global contractors—a significant blow to its external workforce.
Meta’s Talent Grab Sends Ripples Through AI Industry
Meta’s ongoing pursuit of AI dominance has reshaped industry dynamics. Dissatisfied with its LLaMA language models, Mark Zuckerberg reportedly spearheaded a bold initiative to build superintelligence, aggressively hiring talent from OpenAI, Google, Anthropic, and Apple.
Scale AI, long known for its expertise in data annotation, has been caught in the crossfire. In fact, its past relationships—particularly with OpenAI—have now become liabilities. According to reports, OpenAI and Google have both distanced themselves from Scale AI following Meta’s involvement, citing conflicts of interest.
Notably, Alexandr Wang and Sam Altman (CEO of OpenAI) were roommates during the COVID-19 lockdowns, a symbol of the company’s once-close partnership with OpenAI. That alliance now appears to be over.
What’s Next for Scale AI?
Despite the restructuring, Scale AI says it’s not stepping back from the AI race. A spokesperson told Bloomberg that the company is pivoting toward enterprise and government contracts—and plans to hire hundreds more employees later this year to support those efforts.
While it’s clear the Meta investment reshaped Scale AI’s future, it remains to be seen whether the company can rebound and rebuild trust in an industry now deeply fractured by competition and alliances.
Also Read : Scale AI Lays Off 14% of Workforce, Winds Down Data-Labeling Ops
