Meta Makes $15 Billion Bet on AI Startup Scale AI with 49% Stake
In a significant move, Meta, the parent company of Facebook and Instagram, has invested $15 billion in AI startup Scale AI, acquiring a 49% stake in the company. The deal is the latest example of large technology companies making strategic acquisitions to acquire talent in the highly competitive field of artificial intelligence (AI).
Experts say that such acquisitions are not just a trend but a necessary strategy for these companies to stay ahead in the AI race. As demand for AI talents continues to increase, Meta's move is expected to attract more attention from other tech giants.
In recent years, large technology players have been acquiring AI startups to strengthen their technology teams. Microsoft paid $650 million to AI startup Inflection AI, while Amazon hired senior executives from Adept, an AI startup that joined its AGI team.
The Indian region is also witnessing a rise in such acquisitions. Domestic AI startups, Krutrim and Sarvam, have acquired semiconductor startup Bodhi Computing and legal platform Samta Law, respectively, to expand their offerings in new sectors.
According to Sachin Arora, partner and leader - data & analytics, agents and cloud at PwC India, companies are willing to buy entire teams to accelerate their AI roadmap due to the shortage of foundational AI talent. Meta's $15 billion investment is a prime example of this trend, with Scale AI founder Alexandr Wang joining Meta CEO Mark Zuckerberg as part of the social media giant's new AI lab focused on superintelligence.
Regulatory scrutiny has increased in recent times, prompting established tech giants to grow through reverse acquisitions without triggering anti-trust alarms. EY India technology consulting partner Hari Balaji said that acquisitive deals are also a means for companies to enter highly competitive sectors and acquire new customers.
The Indian market is still in its early stages of AI adoption, with most acquisitions being small-scale. However, experts expect significant M&A activity as the region continues to grow in terms of complexity and maturity, similar to what has happened in the US.