Meta (yes Facebook) shops talent and growth in the AI universe: “Meta has confirmed its long-rumored plans to invest $14.3 billion in startup Scale AI. The deal represents Meta’s first major minority investment, and its second-biggest deal overall, following the acquisition of WhatsApp. Scale AI’s CEO, Alexandr Wang, will take a position at Meta, heading up a new lab dedicated to the pursuit of artificial general intelligence.” – LinkedIn News
This is the consequence of government litigation and regulation. When the US took Meta to court over Instagram and WhatsApp acquisitions, the company got the memo that acquisition would not be readily tolerated. With that, a new model would be required to do what must be done and this new acquisition is a case study.
Yes, discover great companies, pay tons of money and push the core team of the startup out so that over time, nobody will remember the “independent” company. At 49% for Meta in Scale AI, if you add Wang’s equity, Meta+Wang combo becomes the majority of Scale AI and that means Scale AI is largely controlled from outside its home. Before now, Meta would have acquired 100% of the company! But the government closed that path.
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But for investors, this is a dream: $13.8b to $29b in less than 12 months! They know what happened and are celebrating. I mean this is a big dance. Before dilution, YC’s $125k in Scale AI is now worth about $2 BILLION! Great Lord, Tekedia Capital needs this type of luck! American wonder is a science.
Wang is now an employee of Meta. He has resigned from his company. Also, he is joining Meta with some engineers from Scale AI. If Meta has 49% and when you add Wang’s equity (at least it should be 2%), the Meta-Wang team will have the voting rights to shape Scale AI’s future. Meta is giving him all the money he needs and Scale AI is now a weekend thing for him.
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