- Scale AI helps companies label data for use in artificial intelligence models
- It has had trouble keeping up with one of its customers during COVID-19
- Scale is now worth $3.5 billion and breaking even
Recently, Scale announced that it has raised $155 million, led by Tiger Global, at a valuation of over $3.5 billion.
Scale AI, founded in 2016, specializes in performing that work for its clients. Customers include Airbnb, General Motors, Nvidia, OpenAI, Pinterest, and DoorDash. Now Scale is breaking even, founder and CEO Alex Wang told CNBC on Monday, even as it more than doubled its annualized revenue run rate year-over-year in the third quarter. In a major validation for its business model.
The AI market isn’t as large and easy to understand as the market for, say, social media. It amounts to an enabling technology, like database software, in the sense that AI can be embedded into existing products. Still, it’s a real, and growing, market.
In revealing its plan to go public last month, C3.ai, a company looking to trade under the ticker symbol AI. IDC estimates the enterprise artificial intelligence software market will be worth $44 billion in 2024, up from $18 billion in 2020.
Scale can handle a variety of data that customers send to it. Contractors review the data and annotate it as needed. Wang said Scale strives to stand out by focusing on doling out very high-quality data and solving problems with technology at scale.
Scale AI business model
Scale, which charges based on the amount of data it processes for customers, has seen major growth by working with DoorDash. The delivery-service has experienced accelerated growth this year as people order food deliveries during the coronavirus pandemic. “We’re frankly just trying to keep up,” Wang said.
San Francisco-based Scale sought to be more conservative with its money as the pandemic created a U.S. recession.
“I think we were fortunate,” Wang said. “We were able to mostly kind of be a bit less aggressive than we were going to be.” The company slowed the pace of hiring, he said. The idea is to remain helpful to its customers — Wang doesn’t want the company to just disappear one day.
The company’s financial position is enabling it to make its own investments. Scale said it is acquiring Helia AI, a start-up that was building software to help companies run AI models on video streams in real-time. The team includes people who worked on Tesla’s Autopilot system.
“There’s a certain level of vision and experience with working with very large-scale machine learning problems that we’re able to gain through the acquisition,” Wang said.
