The partnership between Meta Platforms Inc. (NASDAQ:META) and Scale AI is reportedly showing signs of strain, with a key executive leaving Meta just two months after the partnership was formed.
Ruben Mayer Exits Meta As TBD Labs Turns to Rival Vendors
Ruben Mayer, former Senior Vice President of GenAI Product and Operations at Scale AI, has left Meta after only two months. Mayer, who was brought over by Scale AI CEO Alexandr Wang, disputes some details about his role at Meta but confirmed his departure was due to a “personal matter,” according to TechCrunch.
Check out the current price of META stock here.
Meta's TBD Labs is said to be collaborating with alternative third-party data labeling vendors, including Scale AI's key rivals Mercor and Surge, for its upcoming AI models. Although Meta has invested heavily in Scale AI, researchers at TBD Labs reportedly favor Surge and Mercor, pointing to quality issues with Scale AI's data.
Meta, Scale AI did not immediately respond to Benzinga’s request for comment.
Meta's $14.3 Billion Scale AI Bet Followed by Major Layoffs
The recent developments are a significant shift from the initial positive outlook of the partnership. In June, Meta made a strategic minority investment in Scale AI, valuing the company at over $29 billion, as part of a broader partnership to accelerate AI development.
Following Meta’s $14.3 billion investment in Scale AI, the San Francisco startup laid off 14% of its total staff, as reported. This was seen as a move to streamline operations and focus on the company’s core business areas. The company’s new CEO, Jason Droege, attributed the layoffs to “shifts in market demand”.
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Meta's AI Hiring Freeze Raises Concerns About Future Growth
Meta halted hiring following backlash over aggressive recruitment tactics, including nine-figure compensation packages. This freeze, which bans external hires and internal transfers within the AI division, was implemented after Meta recruited over 50 researchers and engineers from competitors, including OpenAI and Alphabet Inc. (NASDAQ:GOOGL).
The current challenges with Scale AI, coupled with the hiring freeze, could potentially impact Meta’s AI development efforts, which are crucial to the company’s long-term strategy.
Benzinga's Edge Rankings place Meta in the 81st percentile for quality and the 85th percentile for growth, reflecting its strong performance in both areas. Check the detailed report here.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
