Nvidia-Backed Scale AI Reportedly Eyes $25 Billion Valuation In Tender Offer Amid Explosive Demand For Labeled Data And Machine Learning Tools

Backed by companies like Nvidia Corp. NVDA, Amazon.com Inc. AMZN, and Meta Platforms Inc. META, Scale AI is reportedly seeking a valuation of up to $25 billion in a new tender offer.

What Happened: Scale AI is in talks to launch a tender offer that could value the company at nearly double its previous valuation of $14 billion from last year, reported Business Insider, citing multiple sources who have seen the deal.

The terms of the deal, where existing shares are sold by early investors or employees, are still being finalized, and the final valuation could fluctuate, the report noted.

Founded in 2016, the San Francisco-based company plays a critical role in the AI ecosystem by providing high-quality labeled data, essential for training models like OpenAI's ChatGPT.

However, the company is also facing scrutiny. The U.S. Department of Labor is reportedly investigating Scale AI's compliance with the Fair Labor Standards Act, raising questions about labor practices amid its rapid growth.

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Why It's Important: On Friday, Elon Musk also acquired his social media platform X through xAI in a $33 billion deal.

Last month, it was reported that Ilya Sutskever, OpenAI’s co-founder and former chief scientist, is reportedly securing over $1 billion in funding for his AI startup, Safe Superintelligence (SSI), driving its valuation past $30 billion.

SoftBank Group SFTBF SFTBY is also reportedly in discussions to lead a new funding round for OpenAI, aiming to raise $40 billion. This investment could push the ChatGPT creator's valuation to $300 billion, marking a record for private company funding.

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