Meta’s substantial $14.8 billion investment in Scale AI, along with the hiring of Scale’s CEO, has prompted scrutiny regarding how U.S. regulators will approach acquihire-style transactions during the Trump administration. This arrangement grants Meta a 49% nonvoting interest in Scale AI, which employs gig workers to label training data for artificial intelligence systems. Scale AI’s clientele includes major competitors such as Microsoft and OpenAI, raising potential concerns over competitive fairness.
Since Meta did not acquire a controlling share of Scale, the transaction does not automatically trigger antitrust scrutiny. However, regulatory authorities might still investigate if they believe the structuring was intended to evade oversight or undermine market competition. Early reactions to this deal are emerging; for instance, Google reportedly severed ties with Scale AI following the announcement of Meta’s investment, while other clients may be reevaluating their agreements.
In connection with this deal, Alexandr Wang, the 28-year-old founder and CEO of Scale, will join Meta but will remain on Scale’s board with limited access to company information. The regulatory landscape under the Trump administration has tended to be more lenient towards AI ventures, although officials have expressed concerns about the dominance of large tech firms. Some legal experts note that Meta’s strategy could minimize its regulatory exposure due to the nonvoting minority stake.
Nonetheless, critics, including Senator Elizabeth Warren, argue that closer examination of such deals is necessary to prevent anti-competitive practices. Meanwhile, the Federal Trade Commission (FTC) has been investigating similar arrangements, maintaining scrutiny over potential mergers and acquisitions in the tech industry. The Meta-Scale agreement exemplifies a broader trend where technology firms engage in strategic investments and talent acquisitions to secure vital AI resources while avoiding extensive antitrust inquiries.
As investment in AI continues to increase, regulators will face the challenge of determining the legitimacy of these deals and their impact on market competition.