Scale AI CFO Dennis Cinelli.
Courtesy of Scale AI.
After Meta shocked the tech world in June by saying plans to speculate $14.3 billion in Scale AI, primarily as a solution to rent the startup’s founder, Alexandr Wang, and a handful of his staff, the way forward for Scale was instantly thrown unsure.
OpenAI quickly disclosed that it had been winding down its work with Scale, which prepares the information that synthetic intelligence labs and large tech firms use to coach their fashions. Corporations together with Google and Elon Musk‘s xAI additionally paused work with Scale after the deal, in response to a number of media stories.
However virtually 5 months after the blockbuster announcement, Scale AI CFO Dennis Cinelli has a really completely different message to share. The 1,000-plus particular person firm, he says, is alive and properly.
“Individuals mischaracterize this deal as some form of acquihire or some form of licensing deal, which isn’t true,” Cinelli, who joined Scale in 2022, instructed CNBC in an interview. “We’re an organization that has signed a few of the finest offers we now have had within the historical past of our firm, simply within the final two, three months.”
Based in 2016, Scale is finest identified for its information enterprise the place it competes with firms together with Appen, Surge AI and Mercor. Scale additionally has an functions enterprise that creates customized options to assist governments and huge enterprises deploy AI. The U.S. Division of Protection signed a $99 million contract with Scale in August, adopted by one other $100 million contract in September.
Cinelli, 42, mentioned each components of the enterprise are rising and bringing in income that is “properly into the 9 figures,” although he declined to share extra particular income numbers. The startup generated near $1 billion in income final yr, earlier than the Meta deal, a spokesperson instructed CNBC in August.
Whether or not Scale has a viable path ahead has been a giant matter in Silicon Valley. The Meta transaction was lumped in with various acquihires which have taken place within the business, although at a notably increased value. Since early final yr, Microsoft, Amazon and Google have every orchestrated offers to usher in high AI expertise and license sure know-how with out having to face the regulatory hassles that include full-blown acquisitions.
In July, Google spent about $2.4 billion to rent Windsurf co-founder and CEO Varun Mohan and different senior analysis and improvement staff. The settlement did not embrace an funding and got here with a nonexclusive license to a few of Windsurf’s know-how.
Already exited?
Greg Martin, who works on pre-initial public providing inventory gross sales as managing director at Rainmaker Securities, known as the Meta-Scale association a “quasi-acquihire,” and mentioned traders do not know what to make of the corporate as a result of “it does not really feel like it could possibly go public anymore.” He mentioned he is seeing way more investor curiosity in names like Anthropic and xAI.
“Individuals do not actually perceive what the longer term exit is for Scale,” Martin mentioned. “Or did it type of have already got its exit?”
Scale has been making an attempt to persuade potential traders, staff and clients in any other case.
Jason Droege, who was promoted to interim CEO at Scale from technique chief following Wang’s departure, mentioned in a weblog submit days after the deal was introduced that the startup wasn’t pivoting or “winding down.”
FILE PHOTO: Jason Droege speaks on the WSJTECH reside convention in Laguna Seaside, California, U.S. October 22, 2019.
Mike Blake | Reuters
Cinelli mentioned that Scale continues to work with “all the most important AI labs and tech firms,” although he declined to touch upon particular clients.
“We had conversations, everybody had questions, naturally,” he mentioned. “We’re nonetheless an impartial firm, we’re not captive to Meta, we’re nonetheless in enterprise with all our clients. As soon as we have gone by these conversations, I believe everybody type of understood.”
OpenAI, Google and xAI will not be presently listed as clients on Scale’s web site, and representatives from the businesses did not reply to CNBC’s request for remark. Meta is called as a consumer.
Scaling after Wang
Wang, who’s now 28, grew to become the world’s youngest self-made billionaire by constructing Scale, although he misplaced that title to Polymarket founder Shayne Coplan, 27, in October, in response to Forbes. Wang’s departure was a giant loss for the corporate, however Cinelli mentioned the “overwhelming majority” of staff are nonetheless there.
With its funding, Meta has a 49% stake in an organization valued on paper at $29 billion. However Meta has no voting energy, a Scale spokesperson instructed CNBC in June, and there is no product integration between the 2 firms.
Cinelli mentioned Scale’s information enterprise has grown each month because the Meta deal, and its functions enterprise has doubled within the second half of 2025 in contrast with the primary half. Scale expects the functions unit to be the first income driver for the corporate sooner or later, Cinelli mentioned.
Nonetheless, Scale has resized. In July, Droege shared that the corporate was shedding 200 full-time staff, or roughly 14% of its workforce.
“These modifications will make us extra nimble — enabling us to react extra shortly to shifts available in the market and buyer wants,” Droege wrote in a memo on the time.
On Tuesday, Scale mentioned it is seeking to rent 200 individuals for brand new roles throughout all areas of the enterprise. The corporate can also be increasing to bigger workplaces in New York, Washington, D.C., St. Louis and London.
Scale’s largest hub is in San Francisco, the place it occupies about 180,000 sq. ft of house that was beforehand utilized by Airbnb.
“We’re doubling down on development,” Cinelli mentioned.
Scale nonetheless has a protracted solution to go to justify its newest valuation, which is greater than double its $13.8 billion worth from its final fundraise in 2024. Cinelli mentioned he is assured the difficulty will “resolve itself.”
The corporate has $1 billion on the steadiness sheet, Cinelli mentioned, so it does not want to boost extra money anytime quickly. Scale additionally has a brand new focus, which Cinelli mentioned has helped in recruiting, pushing its supply acceptance charge to the very best ever.
Underneath Wang’s management, Scale’s mission was to “strengthen human sovereignty.” In an all-hands assembly in September, Droege launched a brand new mission — “to develop dependable AI techniques for the world’s most necessary choices,” in response to a spokesperson.
Cinelli mentioned all of it provides as much as a trajectory that stands in stark distinction to public notion.
“The outcomes we’re placing up, it isn’t an organization that is like a zombie firm,” he mentioned.
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