Scale AI Valued at $3.5B After Series D Fundraising Round

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Scale AI is a data labeling startup headed by 23-year old Alex Wang. Its value is now $3.5 billion. The four-year-old startup raised a $155 million Series D funding round led by Tiger Global Management. Based in San Francisco, its customers include Airbnb, General Motors, DoorDash, Nvidia, Toyota, OpenAI, Pinterest, and numerous other major corporations.

Scale AI Services

Scale AI Alexandr Wang
Scale AI Alexandr Wang
Image credit: @alexandr_wang

Alex Wang co-founded Scale AI in 2016 with the mission of reducing one point of friction that has been slowing down AI development — annotating large data sets for AI platforms. Developers send the data via the company’s Application Programming Interface (API). From there, the Scale AI platform produces scalable, accurate training data. This training data can then be used to build machine learning algorithms.

Triple Last Year’s Valuation

Scale AI views itself as playing an impactful role in accelerating AI industry progress. As Alex Wang describes it: “The potential applications of AI are going to deeply improve the world: scalable medical diagnosis to everyone in the world, massive reduction in driving accidents, goods which are dramatically cheaper to manufacture and transport, and much more. What’s holding us back from building those dreams is lack of infrastructure. While many organizations are adopting AI, they are forced to build their technology stack from scratch, significantly slowing progress.”

The Company Evolves

Scale AI Plans to Acquire Helia

In describing the strategic rationale behind the Helia acquisition, Wang notes “the one thing that we were noticing across our whole customer base was that more and more customers, even beyond just the self-drive folks, were wanting to do AI on real-time video. And so it was becoming this expertise that we knew just wasn’t going to go away.”

Although Scale AI’s focus on high-quality data annotation and ability to scale machine learning infrastructure puts it at a distinct advantage, the company faces competition. Appen, an Australian company, acquired a startup called Figure Eight in 2019 for $300 million. This acquisition brought together two major data annotation companies. The unified business will be able to process increased volumes of data that supports machine learning and AI. Additionally, offers a service called Mechanical Turk, which breaks down time-consuming projects into smaller pieces, and then outsources those microtasks to many dispersed workers over the internet. These tasks may include sorting and analyzing data sets for machine learning applications.

Autonomous Vehicle Development

Customer satisfaction with Scale AI’s capabilities has been strong. Brandon Moak, Chief Technology Officer of the self-driving trucking startup Embark, states that “Scale AI makes it easy to focus on developing leading self-driving technology rather than the operations of labeling data. The scale platform provides the technology and operations to power our machine learning development and is our trusted training data solution.”

Scale AI’s platform has also been a hit among companies specializing in drone and robot development. Its image annotation, Lidar, and video APIs have powered computer vision for drones and robotics using high-quality training data.

It is estimated that the AI market will be worth $44 billion by 2024, up from $18 billion in 2020. As AI and machine learning progress continues to accelerate, Scale AI’s ability to provide essential data services and operate at scale will become all the more relevant.

Ryan Carpenter serves as Attorney and Managing Director of Carpenter Wellington. Ryan advises clients across a broad set of corporate and commercial matters.

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