Startup Scale AI targets $25 billion valuation in tender offer
Scale AI explores tender offer with valuation up to $25 billion
Artificial intelligence startup Scale AI is seeking a valuation of up to $25 billion through a potential tender offer, as it looks to capitalize on soaring demand for AI technology.
The California-based company, which provides accurately labeled data crucial for training AI models like OpenAI’s ChatGPT, has seen its valuation rise sharply. In a funding round last year, Scale AI was valued at nearly $14 billion, reports Reuters.
Backed by tech giants Nvidia, Amazon, and Meta, the startup plays a key role in supplying high-quality data to machine learning systems, making it a vital player in the AI ecosystem.
Riding the AI Investment Wave
The push for a higher valuation comes as the AI industry experiences an unprecedented investment boom. Major technology firms are integrating AI into their products and services, fueling demand for advanced AI chips, machine learning tools, and high-quality training data.
Startups like Scale AI, which cater to this expanding market, have been among the few bright spots in private funding, even as other tech sectors face investor caution. According to Business Insider, discussions over the terms of the tender offer are ongoing, and the final valuation could change.
While Scale AI has not officially commented on the report, the company’s growth aligns with broader industry trends. With AI increasingly becoming a strategic priority for global tech firms, businesses involved in AI infrastructure—such as data labeling and processing—are attracting strong investor interest.
Regulatory Scrutiny and Future Prospects
Despite its growth, Scale AI is under scrutiny from U.S. regulators. The Department of Labor is currently investigating the company’s compliance with the Fair Labor Standards Act, which governs worker protections and wage standards.
As AI adoption accelerates, regulatory oversight is also intensifying. The outcome of the Department of Labor’s probe could have implications for Scale AI’s business model and labor practices. Investors and industry observers will be closely watching developments in both the tender offer discussions and regulatory matters as the company moves forward.
Reminder, FuriosaAI, a South Korean semiconductor startup focused on AI inferencing, has turned down an $800 million acquisition offer from Meta Platforms Inc., choosing instead to pursue its growth independently.
