Meta To Dump $10 Billion Into AI

By Douglas A. McIntyre Published Jun 8, 1:10PM EDT

Key Points

Meta Is Making AI Investment
ScaleAI Is A Key Industry Player

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Meta Platforms (NASDAQ: META | META Price Prediction) plans to make a huge investment into a relatively new AI platform. Much of AI is relatively new, and its technology is not yet entirely proven. In the AI arms race among mega tech companies, Meta may not have a choice. It needs to keep up with the industry.

According to Bloomberg, the company is called ScaleAI. “Scale AI, whose customers include Microsoft Corp. and OpenAI, provides data labeling services to help companies train machine-learning models and has become a key beneficiary of the generative AI boom.” It does give Meta an inside track on two of its competitors.

The AI investment plans of the largest tech companies. Meta is talking about $65 billion. Amazon (NASDAQ: AMZN) and Microsoft (NASDAQ: MSFT) are closer to $50 billion. OpenAI is in the same neighborhood. Elon Musk’s XAI has already opened a huge facility in Tennessee.

The challenge that Meta has is access to energy. Meta has signed a $10 billion deal with utility Constellation Energy (NYSE: CEG) to provide eclectic power. However, former Google CEO Eric Schmidt thinks that 99% of the electricity generated in the US over the next decade may be used for AI.

ScaleAI is more than energy play, according to Bloomberg. “Scale plays a key role in making AI data available for companies. Because AI is only as good as the data that goes into it, Scale uses scads of contract workers to tidy up and tag images, text and other data that can then be used for AI training.”

One lesson from the news about the investment is that it involves humans. AI has not taken every function in the industry yet.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.