Meta buys a 49% stake in Scale AI while Surge and Mercor grow by supplying expert labelers
After the 2023 reporting (B05-26), human-data vendors consolidated and moved up-market.
- Date
- 12 June 2025
- Who
- Scale AI, Meta, Surge AI, Mercor, OpenAI, Google
- Confidence
- Medium (company and press figures; several are reported, not audited)
- Deep dive
- RLHF and instruction tuning (how base models became assistants)
Tier: Supporting · Significance: 3/5 · Org(s): Scale AI, Meta, Surge AI, Mercor, OpenAI, Google · Confidence: Medium (company and press figures; several are reported, not audited) After the 2023 reporting (B05-26), human-data vendors consolidated and moved up-market. On 2025-06-12 Meta put $14.3 billion into Scale AI for a 49% non-voting stake while founder Alexandr Wang left to join Meta (CNBC).
Reuters, via CNBC, reported on 2025-06-14 that Google, Scale's largest customer (about $200 million planned for 2025), intended to cut ties, with Microsoft and xAI also reportedly backing away. OpenAI's statements conflict. On 2025-06-13 its CFO had said OpenAI would keep working with Scale as one of many vendors, but on 2025-06-18 a spokesperson said it was winding down work with Scale, having pulled back for six to twelve months, and denied the Meta deal influenced this (CNBC, 2025-06-14; CNBC, 2025-06-18). Scale cut 200 employees (about 14%) and ended work with 500 contractors in July (TechCrunch, 2025-07-16). Scale also faced contractor lawsuits over classification, pay and psychological harm, and a Department of Labor investigation that was later dropped (TechCrunch, 2025-01-22; 2025-05-09).
Surge AI, founded in 2020, was reported by TIME to have surpassed $1 billion in 2024 revenue, work with over a million contractors and be pursuing a valuation above $25 billion (TIME, 2025-08-26). A proposed class action filed in San Francisco Superior Court in May 2025 (Cavalier v. Surge Labs, represented by Clarkson Law Firm) alleges Surge misclassified its data annotators as independent contractors (Surge did not respond to a request for comment in the coverage I saw) (Bloomberg Law summary; Clarkson; allegations only, I read these through search-result summaries).
Mercor raised $350 million at a $10 billion valuation, sourcing domain experts (scientists, doctors, lawyers) at hourly rates, and said it managed over 30,000 contractors paid over $1.5 million a day (TechCrunch, 2025-10-27; CNBC). Its founder reported an annualized revenue run rate above $2 billion in July 2026 (reported, with a $20 billion valuation talk, per Bloomberg as relayed by TechCrunch) (TechCrunch, 2026-07-09). That growth came after a spring 2026 security incident that exposed contractor data and led Meta to pause work (B05-43c). The July TechCrunch piece itself says the company appeared to have moved past the breach and the contractor lawsuits.
Inference. The demand shift from general crowd labeling to credentialed experts and, later, reward environments tracks the move from RLHF to reasoning RL and verifiable rewards (B07, B08). Open question. Pay and conditions for these larger expert pools are mostly self-reported by the vendors (Backlog). Sources: above.