Scale AI Labels Its Way To Unicorn Status

Photo by Steve Johnson on Unsplash

According to a recent report, the global AI market is estimated to grow at 36% CAGR from $214.6 billion in 2024 to $1.339 trillion by 2030. This has accelerated the growth of companies like Scale AI that are providing resources for development of AI solutions.

Scale AI’s Offerings

San Francisco-based Scale AI was founded in 2016 by former Quora employees Alexandr Wang and Lucy Guo. Scale AI was initially set up to provide resources to tag and label images for AI development. Most data available to use for AI tools is unstructured that can not be consumed directly by AI tools. Scale AI saw a big opportunity within the Autonomous Vehicle industry to review and label driving footage to train AI models. It provides the resourcing effort needed for the highly resource-intensive effort of labeling data. In 2019, it helped OpenAI train GPT-2.

Today, Scale AI continues to provide human oversight to manage and annotate large volumes of data, which are vital for training AI systems across other industries including defense, AV, and even TikTok. It claims to have made 13 billion annotations till date and over 87 million gen-AI data labels.

Scale AI had got some bad rap early on when it was known to have hired thousands of gig workers in Africa or Asia working for its subsidiary Remotasks. Remotasks was known for hiring very low-paying workers and often delaying payments to the workers. Of late though, Scale AI has also diversified to hiring more specialized workers such as lawyers, accountants, and dual language experts to train and test models for companies from OpenAI and Cohere to Anthropic and Google.

Scale AI’s Financials

For now, Scale AI remains privately held. It does not disclose its financials, but analysts estimate that it generated revenues of over $675 million, growing 150% over the year. Earlier this year, it raised $1 billion in a round led by Accel that valued it at $13.8 billion. In 2021, it had raised $325 million at a valuation of $7.3 billion. Its investors include Nvidia, Meta, Amazon, Y Combinator, Index Ventures, Founders Fund, Coatue, Thrive Capital, Spark Capital, Tiger Global, Greenoaks Capital and Wellington Management, Cisco Investments, DFJ Growth, Intel Capital, ServiceNow Ventures, AMD Ventures, and WCM Investment Management.

Scale AI is not the only player in the industry though. The market is big enough to allow several players like CoreWeave, Labellerr, V7, Clarifai, Labelbox and many others to prosper.

In a world of fast accelerating automation, it seems a manual task is being valued at a premium.

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Disclosure: All investors should make their own assessments based on their own research, informed interpretations, and risk appetite. This article expresses my own opinions based on my own research ...

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