Scale AI: The $29B infrastructure Behind OpenAI, Meta, and the U.S. Military

(5 minutes)

Hi 👋, this is the Today in AI Newsletter: The weekly newsletter bringing you one step closer to building your own startup.

We analyze a cool, industry-shaping AI startup every week, with a full breakdown of what they do, how they make money, how much they’ve raised, and the opportunity ahead. 

Let’s get to the good stuff in this email: 

• 📈 This startup helps companies to label, structure and evaluate their data to train their AI models

• 🚀 They’re on track to hit $1.5 billion in annualised run rate by the end of 2025

• 💰 Meta just acquired 49% of the startup for $14.3B at a $29B valuation

Before we begin I’d like to thank today’s sponsor: Cloudways

Cloudways is hosting a FREE online event for digital pros embracing AI

📅 June 24–25 | ⏰ 11 AM – 3 PM ET | 💻 Free to attend

If you’re building or running a digital agency, AI isn’t optional — it’s your next competitive edge.

At The Agency Advantage, Cloudways is bringing together world-class founders, marketers, and growth leaders (like James LePage of Automattic and Vito Peleg of Atarim.io) to show how AI is reshaping the agency model - from workflows to service delivery.

👉 Register now for free - spots are filling fast.

So what’s the startup and who are the founders behind it? Here’s the story of Scale AI and Alexandr Wang 📈

Scale AI was founded by Alexandr Wang and Lucy Guo in 2016 with the mission to provide the infrastructure for AI to develop safely.

Most AI companies build models. Scale builds the fuel that powers them. 🚀

At its core, Scale helps companies label, structure, and evaluate data so it can be fed into large AI systems.

They operate a platform called Outlier which acts as the “Uber for AI.” A global network of contributors (e.g. nurses, engineers, soldiers) help clean and refine raw data. 📊

Scale helps companies deploy advanced models, especially in government & enterprise. 🏢

From satellite image recognition for the U.S. Army to AI agents that run internal ops.

 They’ve already powered AI systems at OpenAI, Meta, Google, and the Department of Defense - not just with data, but insights and infrastructure. 🏯

Their core philosophy, according to Alex Wang, is that "data is the new code". 🧑‍💻

Backstory 👀

Alexandr Wang was born in Los Alamos, New Mexico, in 1997. He grew up super interested in science and tech, as both of his parents were Chinese immigrant physicists who worked at the Los Alamos National Laboratory. 🧪

This environment, known as the birthplace of the atomic bomb, gave Alex an early appreciation for intellectual curiosity and hard work....

Conversations at the family dinner table often revolved around complex scientific concepts like black holes, wormholes, alien life, and supernovae. 👽

Wang had an extraordinary aptitude for mathematics from a young age, with his parents teaching him algebra in second grade. 

By fourth grade, he entered his first math competition in New Mexico, where he started becoming competitive - he scored the best among all fourth graders in the state… 🥇

He progressed quickly, learning calculus in middle school and engaging in college-level math.

In high school, his obsession shifted to computers and programming, as he realized that with coding, he could actually "make stuff". 🧱

Around age 16, he was exposed to AI and AI safety at summer camps in San Francisco, organized by some pioneers in the AI community like Paul Christiano, Greg Brockman, and Eliezer Yudkowsky. ⛺

Something else Alex loved was music - he played the violin since age nine. 🎻 He was also into philosophy, particularly Nietzsche’s work. 

Dropping out of MIT 🏛️

After graduating from Los Alamos High School a year early, he took a gap year. 

He moved to Silicon Valley and worked as a software engineer at Addepar and then as a tech lead at Quora, where he met Lucy Guo… 🖥️

He then went to MIT for just one year, only looking into AI courses and taking only the HARDEST machine learning classes at MIT.

Then 2 things happened that changed the whole trajectory of his life…

1. An AI (AlphaGo) beat the world champion in the game of Go - a major breakthrough for AI that made Wang realize that "this stuff is really happening". 🎮

2. Alex had this personal project where he built a camera inside his fridge to catch his roommates stealing food. He noticed that the AI he was trying to build failed because it didn’t have enough high-quality data; it gave too many false positives and negatives. ✅❓

This was his "light bulb moment," realizing that data was the major bottleneck in AI development, and no one was focused on solving this problem. 💡

In 2016, he dropped out of MIT, moved to SF, joined Y Combinator, and co-founded Scale AI with Lucy Guo, all at age 19.

Early Beginnings of Scale AI 🐣

The early days of Scale AI were "gnarly" and "rough and tumble". 

Alex experienced a "wandering mode" for about a year - the company's path and potential for success weren't very clear. 😖

As a 19-year-old CEO, Alex got hit with reality - no one would work for a 19 year old. He needed the best engineers in the industry if he wanted to make this happen.

He resorted to relying on hiring friends from college who trusted him. The company's initial growth was slow - they only had 3 people for the first year… 🐢

Early customer use cases were pretty stupid at first. People first used Scale for things like finding illegal t-shirt designs or improving furniture search algorithms. Then they started using it for self-driving cars. 🚘

Investors were still skeptical, they thought the self-driving market was too small for Scale AI to grow…

Alex also saw a lot of "bullshit" in the AI industry - a lot of people were stubborn about the size the AI industry could reach. 😠

There was one time, he recalls, a senior investor confidently dismissed the need for more AI data when Alex pitched. 📊This was obviously proved to be completely wrong over time.

By 2021, Alexandr Wang officially became the youngest self-made billionaire in the world at just 24 years old… Scale AI hit a $7.4B valuation and he owned a 15% stake. 🤑

Stats 📊

📈 Fast forward to today, Scale AI has grown from a few people to over 1,000 employees.

💎 On its Outlier platform, contributors earned over $500 million in the last year across 9,000 towns in the U.S..

💸 The company generated about $870 million in revenue in 2024, and is on track to hit $1.5 billion in annualised run rate by the end of 2025.

🤑 Alexandr Wang remains the world's youngest self-made billionaire at age 28, with an estimated net worth of $3.6 billion as of April 2025.

🪖 Scale AI, has secured defense contracts with the U.S. Army working with the DoD on various projects, including image recognition on satellite imagery and military planning.

Over the past 4 years, these contracts add up to ~$400M alone…

💰 In June 2025, Meta acquired a 49% stake in Scale AI for $14.3B at a $29B valuation, more than double Scale AI's previous $14B valuation. 

🤝 Alex also announced his departure from the CEO role at Scale AI to lead Meta's new AI Superintelligence lab - he continues to serve as a director on Scale's board.

Again, thank you to Cloudways for sponsoring this post. I really recommend you to join their webinar on June 24th if you want to use AI to optimize your business’ workflows.

The speakers are the best in the game!

👉 Register now for free

Before you go 👋

Thank you for reading.

Know someone who'd love this newsletter? Share the love.🌟