OpenAI drops Scale AI as a data provider following Meta deal

OpenAI is phasing out its work with Scale AI and cutting ties with the data provider following Meta’s deal with the startup, an OpenAI spokesperson told Bloomberg on Wednesday.

Sarah Friar, the chief financial officer of OpenAI, previously suggested the company would continue its work with Scale AI. Now, it appears OpenAI has changed its tone.

OpenAI said it was already winding down its work with Scale AI ahead of Meta’s announcement last week that it was investing billions of dollars in the startup and bringing on CEO Alexandr Wang. An OpenAI spokesperson told Bloomberg that OpenAI had been seeking other providers for more specialized data to develop increasingly advanced AI models.

OpenAI’s decision to cut ties raises questions about Scale AI’s core data labeling business. Last week, Reuters reported that Google was discussing plans to drop Scale AI as a data provider as well.

As rumors swirled about Meta’s deal with Wang, some of Scale AI’s competitors said they received an influx of interest from AI model providers looking for “neutral” partners.

In a blog post published Wednesday, Scale AI’s general counsel tried to squash the idea that Meta would receive preferential treatment following this deal. Scale AI’s executives said it would not share confidential information from other customers with Meta, and that Wang would not be involved in day-to-day operations.

Despite those claims, it seems that Scale AI’s biggest customers are already pivoting away from the data provider — meaning the startup may have no choice but to change up its business.

In a separate blog post published on Wednesday, Scale AI’s interim CEO Jason Droege said the company would “double down” on its applications business, which involves building custom AI applications for governments and enterprises.