Meta invests $14.3B in Scale AI to kick-start superintelligence lab
461 comments
·June 13, 2025ml-anon
The only way to understand this is by knowing: Meta already has two (!!) AI labs who are already at existential odds with one-another and both are in the process of failing spectacularly.
One (FAIR) is lead by Rob Fergus (who? exactly!) because the previous lead quit. Relatively little gossip on that one other than top AI labs have their pick of outgoing talent.
The other (GenAI) is lead by Ahmad Al-Dahle (who? exactly!) and mostly comprises of director-level rats who jumped off the RL/metaverse ship when it was clear it was gonna sink and by moving the centre of genAI gravity from Paris where a lot of llama 1 was developed to MPK where they could secure political and actual capital. They've since been caught with their pants down cheating on objective and subjective public evals and have cancelled the rest of Llama 4 and the org lead is in the process of being demoted.
Meta are paying absolute top dollar (exceeding OAI) trying to recruit superstars into GenAI and they just can't. Basically no-one is going to re-board the Titanic and report to Captain Alexandr Wang of all people. Its somewhat telling that they tried to get Koray from GDM and Mira from OAI and this was their 3rd pick. Rumoured comp for the top positions is well into the 10's of millions. The big names who are joining are likely to stay just long enough for stocks to vest and boomerang L+1 to an actual frontier lab.
unconstrastive
I wouldn't categorize FAIR as failing. Their job is indeed fundamental research and are still a leading research lab, especially in perception and vision. See SAM2, DINOv2, V-JEPA-2, etc. The "fair" (hah) comparisons of FAIR are not to DeepMind/OAI/Anthropic, but to other publishing research labs like Google Research, NVIDIA Research, and they are doing great by that metric. It does seem that for whatever reason that FAIR resisted productization, unlike DeepMind, which is not necessarily a bad thing if you care about open research culture (see [1]). GenAI was supposed to be the "product lab" but failed for many reasons, including the ones you mentioned. Anyways, Meta does have a reputation problem that they are struggling to solve with $$ alone, but its somewhat of a category error to deem it FAIR's fault when FAIR is not a product LLM lab. Also Rob Fergus is a legit researcher; he published regularly with people like Ilya and Pushmeet (VP of Deepmind Research), just didn't get famous :P.
not affiliated with meta or fair.
[1] https://docs.google.com/document/d/1aEdTE-B6CSPPeUWYD-IgNVQV...
paxys
This is exactly why Zuck feels he needs a Sam Altman type in charge. They have the labs, the researchers, the GPUs, and unlimited cash to burn. Yet it takes more than all that to drive outcomes. Llama 4 is fine but still a distant 6th or 7th in the AI race. Everyone is too busy playing corporate politics. They need an outsider to come shake things up.
dongobread
The corporate politics at Meta is the result of Zuck's own decisions. Even in big tech, Meta is (along with Amazon) rather famous for its highly political and backstabby culture.
This is because these two companies have extremely performance-review oriented cultures where results need to be proven every quarter or you're grounds for laying off.
Labs known for being innovative all share the same trait of allowing researchers to go YEARS without high impact results. But both Meta and Scale are known for being grind shops.
romanhn
Can't upvote this enough. From what I saw at Meta, the idea of a high performance culture (which I generally don't have an issue with) found its ultimate form and became performance review culture. Almost every decision made filtered through "but how will this help me during the next review". If you ever wonder about some of the moves you see at Meta, perf review optimization was probably at the root of it.
anonym00se1
I may or may not have worked there for 4 years and may or may not be able to confirm that Meta is one of the most poorly run companies I've ever seen.
They are, at best, 25-33% efficient at taking talent+money and turning it into something. Their PSC process creates the wrong incentives, they either ignore or punish the type of behavior you actually want, and talented people either leave (especially after their cliff) or are turned into mediocre performers by Meta's awful culture.
Or so I've heard.
pyb
Interesting that "high-impact" on the one hand, and innovative/successful in the marketplace on the other, should be at odds at Meta. Makes one wonder how they measure impact.
lern_too_spel
Beyond that, the leaders at Facebook are deeply unlikeable, well beyond the leaders at Google, which is not a low bar. I know more people who reflexively ignore Facebook recruiters than who ignore recruiters from any other company. With this announcement, they have found a way to make that problem even worse.
gsf_emergency_2
It's not that he needs a Sam Altman, but that he cannot be Sam Altman (for path-dependent reasons related to his standing in international politics),
not any advantage in virtue (or vices, for that matter)
In national politics, Sam is toe to toe with Elon,which is to say, not great, not terrible
mcmcmc
> In national politics, Sam is toe to toe with Elon,which is to say, not great, not terrible
That’s quite the stretch, Elon is now PNG with the MAGA crowd and was already reviled by the left
nostromo
Meta is struggling here for the same reason Microsoft couldn’t stop the talent bleed to Google back in the day.
Even if you’re giving massive cash and stock comp, OpenAI has a lot more upside potential than Meta.
az226
Microsoft back in the day and today still doesn’t pay top dollar. So you can’t get top talent with 65th percentile pay.
com2kid
Microsoft used to have a location advantage, the Seattle area was a lot cheaper than the bay area.
They've long since lost that advantage.
ml-anon
This is wrong. OpenAI has almost no upside now at these valuations and there is a >2 year effective cliff on any possibility of liquidity whereas Meta is paying 7-8 figures liquid.
Metas problem is that everyone knows that it’s a dumpster fire so you will only attract people who only care about comp which is typically not the main motivation for the best people.
bhl
It's not a 2 year cliff: it's 6 months before vesting, then 2 years before you can sell.
coliveira
These people should better make a lot of money while they can, because for most of them their careers may be pretty short. The half life of AI technologies is measured in months.
ipsum2
Rob Fergus is one of the creators of FAIR. It makes sense for him to lead it.
ml-anon
Lead it where?
moralestapia
You forgot LeCunn, but yeah that guy's on its own death spiral.
ml-anon
No I didn’t. He is functionally irrelevant at Meta and he doesn’t actually lead anything.
aipatselarom
Weird, Meta says it's their Chief AI Scientist [1].
But maybe they're wrong ...
krosaen
Anyone know what scale does these days beyond labeling tools that would make them this interesting to Meta? Data labeling tools seem more of a traditional software application and not much to do with AI models themselves that would be somewhat easily replicated, but guessing my impression is out of date. Also now apparently their CEO is leaving [1], so the idea that they were super impressed with him doesn't seem to be the explanation.
[1] https://techcrunch.com/2025/06/13/scale-ai-confirms-signific...
rybosome
Scale has also built massive amounts of proprietary datasets that they license to the big players in training.
Meta, Google, OpenAI, Anthropic, etc. all use Scale data in training.
So, the play I’m guessing is to shut that tap off for everyone else now, and double down on using Scale to generate more proprietary datasets.
mliker
OpenAI and Anthropic rely on multiple data vendors for their models so that no outside company is aware of how they train their proprietary models. Forbes reported the other day that OpenAI had been winding down their usage of Scale data: https://www.forbes.com/sites/richardnieva/2025/06/12/scale-a...
egillie
And scale doesn’t even have the best data among these vendors so I also don’t get this argument
dr_dshiv
Yeah, but they know how to get the quality human labeled data at scale better than anyone — and they know what Anthropic and OpenAI wanted — what made it quality
mattlondon
I wondered that.
But then huge revenue streams for Scale basically disappear immediately.
Is it worth Meta spending all that money just to stop competitors using Scale? There are competitors who I am sure would be very eager to get the money from Google, OpenAI, Anthropic etc that was previously going to Scale. So Meta spends all that money for basically nothing because the competitors will just fill the gap if Scale is turned-down.
I am guessing they are just buying stuff to try to be more "vertically integrated" or whatever (remember that Facebook recently got caught pirating books etc).
moralestapia
Yeah, also the industry could come up with their own Scale if they were forced to.
But probs. it just makes sense on paper, Scale's revenue will pay this for itself and what they could do is to give/keep the best training sets for Meta, for "free" now.
Zuck's not an idiot. The Instagram and WhatsApp acquisitions were phenomenal in hindsight.
trhway
Meta buys 900 AI employees here at less than $20M/head. Pretty cheap these days. Any IP the company has is a bonus.
lettergram
Could be they need a perpetual license to the data too… so they could potentially sue everyone.
rlt
Meta “will have a 49% stake in the artificial intelligence startup, but will not have any voting power”
Wouldn’t Scale’s board/execs still have a fiduciary duty to existing shareholders, not just Meta?
mbesto
The prevailing theory is that Meta did a 49% deal so it didn't set off anti-trust alarm bells. In other words, the 49% doesn't give them ultimate power, but you can best believe when Meta tells them to jump, the board and the execs are going to ask "how high?".
delusional
Yes, but Meta would be able to kick the board and find another one more willing to accept their proposal as the best for shareholders.
Bjorkbat
It's a smart purchase, it's just that I don't see how these datasets factor into super-intelligence. I don't think you can create a super-intelligent AI with more human data, even if it's high-quality data from paid human contributors.
Unless we watered-down the definition of super-intelligent AI. To me, super-intelligence means an AI that has an intelligence that dwarfs anything theoretically possible from a human mind. Borderline God-like. I've noticed that some people have referred to super-intelligent AI as simply AI that's about as intelligent as Albert Einstein in effectively all domains. In the latter case, maybe you could get there with a lot of very, very good data, but it's also still a leap of imagination for me.
Fraterkes
I think this is kind of a philosphical distinction to a lot of people: the assumption is that a computer that can reason like a smart person but still runs at the speed of a computer would appear superintelligent to us. Speed is already the way we distinguish supercomputers from normal ones.
ryanblakeley
Super-intelligent game-playing AIs, for decades, were trained on human data.
zozbot234
I'll believe that AI is anywhere near as smart as Albert Einstein in any domain whatsoever (let alone science-heavy ones, where the tiniest details can be critical to any assessment) when it stops making stuff up with the slightest provocation. Current 'AI' is nothing more than a toy, and treating it as super smart or "super intelligent" may even be outright dangerous. I'm way more comfortable with the "stochastic parrot" framing, since we all know that parrots shouldn't always be taken seriously.
echelon
> It's a smart purchase, it's just that I don't see how these datasets factor into super-intelligence.
It's a smart purchase for the data, and it's a roadblock for the other AI hyperscalers. Meta gets Scale's leading datasets and gets to lock out the other players from purchasing it. It slows down OpenAI, Anthropic, et al.
These are just good chess moves. The "super-intelligence" bit is just hype/spin for the journalists and layperson investors.
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steve_adams_86
Isn’t this monopolistic?
JumpCrisscross
> Isn’t this monopolistic?
By whom? The fact that there is a list of competitors means Meta has no monopoly in AI. And Scale AI has no monopoly in labelled data.
It’s anticompetitive. But probably not to an illegal extent. Every “moat” is, after all, a measure in anticompetitiveness.
hn_throwaway_99
Which is a primary reason Meta took a 49% stake in Scale vs buying them outright.
sumtechguy
yes probably. but it already is. there is also an assumption that meta would turn it off. not saying they will or will not just that there an assumption here.
logicchains
It seems very short-sighted given how far Meta's latest model release was behind Qwen and DeepSeek, both of which relied heavily on automatically generated reasoning/math/coding data to achieve impressive results, not human annotated data. I.e. Scale's data is not going to help Meta build a decent reasoning model.
laborcontract
This is by all indications the world's most expensive acquihire of a single person. Reporting has been that Zuckerberg has seen Wang as a confidant of sorts, and has proposed a vision of AI that's said to be non consensus.
Bjorkbat
Fair enough. If you aren't willing to give your friend $14 billion to join your company so you can hang out more, then are you two really friends?
michaelrwolfe1
Wang didn't get $14b, he only owns about 15% of Scale. We also don't know how much he sold. He could have sold all of his stock (netting him around $4.5b), none, or something in the middle.
mjburgess
I could see a friend giving me 4% of his net worth on those terms, esp. if i might return a few percent, in the fullness of time.
egillie
Where did you find the reporting about the non consensus ai view? That’s the most interesting take I’ve heard on this
krosaen
but did you see that now Wang is leaving as part of this?
paxys
He is leaving to join Meta.
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laborcontract
He is leaving to now work at Meta.
vonneumannstan
I've seen rumours that he is leaking what the other labs are using Scale for which may let Meta catch up...
eaglelamp
It looks like security/surveillance play more than anything. Scale has strong relationships with the US MIC, the current administration (predating Zuck's rebranding), and gulf states.
Their Wikipedia history section lists accomplishments that align closely with DoD's vision for GenAI. The current admin, and the western political elite generally, are anxious about GenAI developments and social unrest, the pairing of Meta and Scale addresses their anxieties directly.
knuppar
> Also now apparently their CEO is leaving
Leaving to join "Meta's super intelligence efforts", whatever that means.
guluarte
they use people for 3 world countries for labeling and fixing models responses, i guess the value is in the human capital
paxys
I doubt Scale is interesting by itself. This is all about Alexandr Wang. Guy is in his mid 20s and has somehow worked his way up in Silicon Valley to the same stature as CEOs of multi trillion dollar companies. Got a front row seat at Trump's inaugration. Advises the DoD. Routinely rubs shoulders with world leaders. I can't say whether there's actual substance or not, by clearly Zuck sees something in him (probably a bit of himself).
DebtDeflation
It's a wild story for sure. Dropped out of MIT after freshman year and starts Scale to do data labeling. Three years later Scale has a $1B valuation and two years after that Wang is the world's youngest billionaire. Nine years after Scale's founding they're still doing less than $1B in annual revenue. Yet Meta is doing a $14B acquihire. There's definitely more than meets the eye. I suspect it involves multiple world governments including the US.
tyre
> Dropped out of MIT after freshman year and starts Scale to do data labeling
I was in their YC batch, so two notes:
1. He didn't start it himself 2. They weren't doing data labeling when they entered YC. They pivoted to this.
andytratt
i don't know Alex directly that well but i believe his "freshman year" skipped all GIRs and was spent polishing off the most advanced graduate courses in CS theory (18.404), machine learning (6.867), algorithms (6.854), etc.
so basically he did MIT at the PhD level in 1 year.
As a classmate myself who did it in 3, at a high level too (and I think Varun - of Windsurf - completed his undergrad in 3 years also)...
Wang's path and trajectory, thru MIT at least, is unmatched to my knowledge.
Lu2025
This guy looks like a front. How's behind him?
moogly
Shades of SBF?
bix6
This is a weird deal?
Meta buys a non-controlling stake and says no customers will be affected but the CEO and others are leaving Scale for Meta. Meta also says they won’t have access to competitor data but at 49% ownership they get major investor rights?
Sounds like an acqui-kill to me?
mooreds
The host on this podcast[0] had a good point about the "investment". It was really a merger, but framed as an investment to sidestep regulators. Key attributes:
* CEO works for meta
* almost but not quite a majority stake taken
0: https://podcasts.apple.com/us/podcast/world-bank-cuts-u-s-gr...
gmd63
These types of "Aaackshually" business strategies are repulsive, and are evidence that these people who wield immense responsibility do not deserve it.
pishpash
It's Zuck what do you expect?
ZiiS
The stake of FB and people now employed at FB at the executive level is clearly over 50% it seems very odd they are convincing anyone this is a minority?
lcnPylGDnU4H9OF
> people now employed at FB at the executive level
I think it's reasonable that this is not counted, unless there's some possible condition on the stock ownership that I'm not aware of. If they ultimately disagree with the decisions from Facebook then they can, in theory, get help from the other stakeholders to override them.
That said, I would not be the least bit surprised if this turned out to be some scheme in which they use a series of technicalities that make the deal look like a merger but "be" an investment.
lucaslazarus
Strikes me more as an attempt to maintain plausible deniability if/when the FTC comes knocking
bix6
Size seems large enough to warrant an FTC look, especially given Meta’s past. But I guess 1% less lets you pass GO :)
Peroni
Yep. They were quite blatant about it in the article:
>The structure was intentional. Executives at Meta and Scale AI were worried about drawing the attention of regulators.
spiderfarmer
The FTC will do nothing. Not under Trump.
JoshTko
Competitors just need to lobby sufficiently to get action
__loam
There is literally an active anti-trust case against Meta right now.
lucaslazarus
Perhaps, but it's worth hedging against a potential Trump-Zuck fallout. Also, the statute of limitations for commencing an antitrust investigation is 4 years (15 U.S.C. § 15b).
Bnjoroge
he's right. Trump is only marginally more M&A-friendly than Biden.
gwbas1c
Reverse acquisition? IE, similar to how Disney "bought" Pixar, but much of Pixar's IP overshadows Disney's IP; or how Apple bought Next and the current MacOS is basically NextOS under the hood.
It's a technique that companies do to avoid disruption: Buy early stage startups, and by the time they could "disrupt" the parent company, the parent company's management is ready to retire, and the former startup's management is ready to take their place.
n2d4
In what way does Pixar's IP overshadow Disney's? Listing the highest-grossing media franchises [1], Mickey Mouse, Winnie the Pooh, Star Wars, and Disney Princesses are on #2-#5 respectively, while Pixar's top spot is #16 with Cars.
[1] https://en.wikipedia.org/wiki/List_of_highest-grossing_media...
gwbas1c
Because, in the 1990s, Pixar's IP was more popular than Disney's. The story (as I remember it from a Jobs biography) was that, in the Disney parks, there were longer lines for Pixar characters than Disney characters.
Someone in leadership (don't remember the name) basically swallowed pride and bought Pixar from Jobs. It was considered a "reverse acquisition" because Jobs had so much stock he technically controlled Disney afterwards.
CSMastermind
My understanding is that the talent at Pixar completely took over the leadership of Disney's animation studios.
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indy
Would buying 49% prevent any government investigations into the deal?
rodonn
It might reduce scrutiny, but not completely prevent it. Clayton act says "No person engaged in commerce or in any activity affecting commerce shall acquire, directly or indirectly, the whole or any part of the stock or other share capital and no person subject to the jurisdiction of the Federal Trade Commission shall acquire the whole or any part of the assets of another person engaged also in commerce or in any activity affecting commerce, where in any line of commerce or in any activity affecting commerce in any section of the country, the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly."
bix6
Yeah 50% may have triggered antitrust
atlasunshrugged
It does seem likely that the deal was at least partially structured to avoid antitrust scrutiny but my impression is that under the DMA/DSA (I can never keep track of which is which) in Europe Meta is technically a gatekeeper and has different obligations so I'll be curious to see what happens there
paganel
If this is marketed as a strategic acquisition for the national interest of the US tech industry in order to counter-act the Chinese trying to catch up on AI then nothing of the sorts will happen.
mliker
It doesn't really affect the other frontier labs too much because OpenAI and Anthropic rely on multiple data vendors for their models so that no outside company is aware of how they train their proprietary models. Forbes reported the other day that OpenAI had been winding down their usage of Scale data: https://www.forbes.com/sites/richardnieva/2025/06/12/scale-a...
b0a04gl
not weird at all if you assume the goal was never to integrate but to neutralize. 49 percent gives them just enough leverage to shape roadmap, slow-roll access, nudge governance. the public terms are clean because the real effects show up over time. it’s a slow freeze.
b00ty4breakfast
That's the MO for all these big players. They don't shell out merely for the marketplace advantage, there's always some meta (no pun intended) Gordon Gecko corpo warfare schtick going on in the background.
To quote Peter Thiel, "competition is for losers".
whitej125
Likely to steer clear of regulatory scrutiny or approval processes (specifically FTC and DOJ).
hoofhearted
This is a very interesting buy because Scale AI has been spamming anyone and everyone on freelancer platforms; and they don’t have a very good reputation online so far from people they have contracted with.
Just go look at what people say about them on Reddit. It’s rare to find anything positive, or even a single brand champion that had some sort of great experience with them.
paxys
Just like Uber, Doordash & co don't have a good reputation among their contract workers. The entire business model is based on exploitation of labor. That doesn't mean it isn't valuable (in a capitalist sense).
hoofhearted
No, those were entirely different user experiences when the services you mentioned were gaining traction and finding product market fit.
UberCab and Palo Alto Delivery were both services that had great success at user experiences for everyone involved including drivers, riders, small businesses, people ordering food. These experiences created brand champions who went out and raved about these technological innovations nonstop.
I don’t see any mentions of any positive experiences with Scale Ai here on HN or Reddit.. maybe that’s the reason behind the acquisition?
paxys
People on HN aren't the ones driving Ubers, so I'm not sure what experiences you are expecting to hear about. Go talk to actual drivers and you'll find that things aren't exactly rosy.
Imnimo
I just don't get why Scale and/or Alexandr Wang are so important to Meta. Like sure, data is good and all, but does Scale really bring something so unique and valuable to the table? What vision or insight does Wang offer that's worth so much?
nrmitchi
Wang has, seemingly, spent just as much time and energy over the last couple of years on PR stunts and publicity than on Scale itself. Between testifying to congress about how China is an AI risk (duh) and how AI is important (obviously), putting out press releases about joining boards of large orgs, and getting himself invited to trumps second inauguration. A high-billion-dollar story-headline framed as "Meta paying $14 BILLION for this one guy" is the same.
It very much seems it's been an investment in getting himself to be more of a "household name in AI". That is exactly what Meta needs (or at least thinks it needs) now.
I very much believe that there is very little moat in AI (currently, and in the forseeable future short some underlying hardware/etc breakthrough), and the success (from a consumer perspective) will come down to which of the big-cos (Facebook v Amazon v Google v OpenAI v Anthropic/Claude) consumers trust more. Zuck is, to put it mildly, *not* a trustworthy name for Meta to associate to leading the product that they want consumers to trust and depend on for their entire lives.
Whether or not Wang has any more qualifications than 1) is somewhat of a recognized AI name, and 2) is okay at speaking confidently on topics someone briefed him about, I don't think really plays much into this. If he needs help/assistance/etc with any of the meta scale/politics/management/etc, zuck can buy that for him.
What Zuck can't seem to buy (for himself) is some level of trust.
laborcontract
Until now I've actually been a believer in the amount of money that Zuck has poured into metaverse investments. I'm not a believer of the metaverse per se, but a believer that innovation takes unafraid capex. The last thing you want to be is scared money like microsoft who chose to scuttle the hololense project over the thought of spending a couple extra billion dollars on it.
But this deal really has left me with my head scratching. Scale is, to put it charitably, a glorified wrapper over workers in the Philippines. What meta gets in this deal is, in effect, is Alexander Wang. This is the same Wang who has said enough in public for me to think, "huh?" Said a lot of revealing stuff like at Davos (dont have the pull quotes off the top of my head) that made me realize he's just kind of a faker. A very good salesman who ultimately gets his facts off the same twitter feed we all do.
On top of what makes this baffling is that Meta has very publicly faced numerous issues and setbacks due to very poor data from Scale that caused public fires in both companies. So you're bringing in a guy whose company has caused grief for your researchers, is not research nor product oriented, and expect to galvanize talent from both the inside and outside to move towards GAI? What is Mark thinking?
Zuckerberg seems to have had all the pieces to make this work but I'm a lot less confident if I'm a shareholder now than a week ago. This is a huge miss.
az226
This is exactly my take. Are you me? :-)
Well said!
dkdcio
> said enough in public for me to think, "huh?"
I love this phrasing
gitfan86
Sam Altman is a huge risk to META. He has similar morals to Zuck and a much better technical team. If OpenAI turns on the slop generator, they could hit Facebook and Instagram hard. Wang is probably smart enough to help navigate that risk.
Illniyar
Matt Levine suggested that this was an aquihire. And the weird setup where they only buy non voting shares is to not trigger any regulatory review
Peroni
$14.3 Billion seems excessive for it to be a pure aquihire play. There's undoubtedly some IP acquisition (or at least exclusive access to certain IP) involved.
tgv
I know "excessive" is technically correct, but at the same time it seems an understatement.
nikcub
It's about 0.85% of Meta's market cap - less than the 1% they paid for (granted, all of) Instagram. They also paid about 1% of market cap for Oculus ($2b into a ~$220b market cap)
Seems about par for Facebook when it comes to company-shifting acquisitions.
az226
Little known secret is they paid $2.7B, not $2B. And Zuck and the FB head of M&A were talking shit about John Carmack’s crazy wife, who was doing his negotiation for him. On WhatsApp no less.
owebmaster
Their fantasy money from ScaleAI’s inflated valuation will easily balance this out on the books.
diggan
> the weird setup where they only buy non voting shares is to not trigger any regulatory review
Do regulators actually fall for these sort of things in the US? One would expect companies to be judged based on following the spirit of the law, rather than nitpicking and allowing wide holes like this.
Loughla
>One would expect companies to be judged based on following the spirit of the law, rather than nitpicking and allowing wide holes like this.
The letter of the law is what people follow. The spirit, or intent, of the law is what they argue about in court cases.
If the regulation says 49% and a company follows it, who's to say they're exploiting a loophole? They're literally following the law. Until there is a court case and precedent is set.
rodonn
The Clayton act explicitly includes partial acquisition as still being covered. "No person engaged in commerce or in any activity affecting commerce shall acquire, directly or indirectly, the whole or any part of the stock... [where] the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly."
There may be some other regulations that are avoided by a partial acquisition, but it doesn't bring it wholly outside of the relevant antitrust laws.
diggan
> who's to say they're exploiting a loophole?
I guess "intent" is what matters really. If the intent is to avoid regulatory review and you could prove that intent, then they're trying to exploit it. That in itself should probably trigger a review regardless. If they've arrived at 49% for some other reason(s) than just to avoid regulatory review, then fair enough.
paulddraper
Laws are comprised primarily of letters.
Spiritual laws is how you get b b kangaroo courts
vessenes
Largest acquihire ever, beating out oculus/carmack, also done by Zuck. Meta is not afraid to build when competing, so I propose this is interesting.
JKCalhoun
I agree. Slightly amused at the running from one side of the boat to the other. So we're done with the Metaverse now?
(Or maybe the metaverse needs AI bots running around … perhaps scalping tickets or something. In fact I get it though — they're looking for the Next Big Thing — as all big companies are. I even think they're on to it this time. The whole metaverse thing was just so obviously misguided, misspent capital.)
paxys
Spending $15B to hire a 28 year old to build you some AI is certainly a move. You can call Zuck many things, but "afraid to take risks" isn't one of them.
dstroot
He was spending $5b a year on whatever the metaverse was supposed to be and even renamed the company. Does anyone here use it? I think he weathers what I consider failure well. Or, conversely he can take big risks without too much blowback.
bardak
He would still be unbelievably rich even if Meta went bankrupt. He is in the unique position to have majority control of one of the world's largest tech companies and can pretty much use it to do what ever he wants. I doubt he cares much about Facebook past it's ability to generate money at this point.
hbay
it's 5b a quarter
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akudha
What is the big risk here? He has the cash to burn and he has full control of his position. Nothing will happen to him if he wastes a few Billions. He is not some poor single mom who has to decide between fixing her car and paying for kid’s Christmas presents
bko
Cash is the least concern. I listened to a podcast about the history of Microsoft and there were times where Gates said "at least it was only money" or something to that effect.
Microsoft floundered an entire decade on mobile and Windows Vista when they were going to lose out on Google that was literally paying OEMs to use their software and Apple, who had a vertical stack and made money off hardware. Huge setback in terms of focus that took them a long time to recover from.
The main constraint is focus of talent to work on one thing. This is a huge move in terms of coordinated effort into this space that may or may not pay off.
paxys
There's a pretty common saying in the tech industry - "if you can solve a problem by throwing money at it then it isn't really a problem".
laborcontract
The risk here is that you've now put a person with no track record of success outside of being good at sales in charge of your AI efforts. You're betting that he's going to be the one to attract talent.
The right leadership might be able to get talent to work for a discount. The wrong one would lead to talent not coming at all.
imiric
If Meta is known for anything besides user privacy violations it's for taking risks that often pay off. They were laughed at for overpaying for Instagram and Whatsapp, yet both were instrumental to their current success. Their continued bet on VR is still highly criticized, yet they were the first Big Tech company in the space, they're the current market leaders, and I'm sure it will have huge ROI in the near future. So is this bet on Wang, as ludicrous as it may seem now.
coliveira
What the commenter is saying is that this is no risk at all because $14B is negligible money for Meta at a year-long scale. It can always be written off as an investment that didn't work. In a company with $1.73T market cap, this is sometimes the loss you get in a single day of trading.
UncleOxidant
Meta already had an AI division led by the venerable Yann LeCun - someone with actual AI bona fides. I'm not seeing any info about what this does to LeCun's position in Meta.
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vonneumannstan
>What is the big risk here?
That this is clearly the wrong person to hire? Maybe Demis or Ilya is worth $15B but Wang? Extremely odd choice...
OtherShrezzing
I don’t think either Demis or Ilya are available for $15bn. They’re already both comfortably billionaires. Demis seems a sensible candidate for heir to the top job at Google in the long term. Ilya is away focusing on super intelligence.
It’s not clear to me why either would take a subservient role in a company flailing incoherently around AI, rather than stick with the incredibly high-leverage opportunities they both have now.
paxys
Spending $15B is a risk. Yes they have the money, but we're talking a quarter of Meta's annual income. That's not nothing.
And money concerns aside, Meta needs to be a major player in AI. If they have made the wrong bet with Scale AI & Wang then the company will suffer in the long term.
twelve40
> Meta needs to be a major player in AI
Honest question, why do they so existentially need to be a major player in AI? It's a social network that connects people, serves UGC and some spam/ads, and sells advertisement. Same but with photos for IG, same but with messages for Whatsap. Which part of this will die without AI? If they are obsessed with chatting with an AI bot on Whatsapp, just plug in grok or openai like Telegram, is that the killer feature worth bazillions of dollars?
(everything else seems like a failed experiment, VR, Libra, Facebook phone, whatever, nobody even remembers half these things)
disgruntledphd2
It's surely mostly a stock deal though, right?
So they won't take the same hit to free cash flow that they might otherwise do.
Still a lot of money and I'm not sure it's worth it. Might be more like Whatsapp than Instagram, tbh.
coliveira
You're thinking in the wrong scale. Meta is a $1.7T company, for them a $15B investment is less than 1% of the company. In the span of a year, this is negligible money.
nroets
If Scale never creates value, he will lose billions of his own money due to his indirect holding in Meta.
coliveira
So what, do you think Mark really worries about losing a few billions in his company?
komali2
I genuinely struggle to understand how that will affect him in any way. Not even any meaningful way, I mean, how could that possible change anything about his life, in any way?
mlinhares
I don't think people understand that once you're a billionaire with full ownership of your business and no risk of being ousted, making or losing billions is irrelevant.
CamperBob2
"Why, at this rate, I might have to shut this place down in.... 60,000 years."
motoxpro
What a weird way to frame a business decision.
lr4444lr
The risk is the lost time by betting on the wrong horse. I don't know much about Wang, but the current phase of the AI race will likely shake out winners and losers of the tech industry who persist for many years to come.
Being first to achieve certain milestones matters a lot.
layer8
Not betting on any horse is unlikely to make you a winner either, however.
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b0a04gl
calling it a risk assumes the goal is success. sometimes you spend 15b not to win, but to make sure no one else does. its board control. meta didnt buy potential. they bought positioning. everything else is narrative dressing.
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written-beyond
I actually ran into the Zuck eating Thai(could be wrong) food in Palo Alto at night. He was having dinner with his wife at the restaurants outdoor seating, sure looked risky for someone as important as him.
WXLCKNO
Mentioning his age to diminish his value and accomplishments is certainly a move.
How old are you and what have you achieved more than Alexandr Wang?
abletonlive
Just downvote them and move on. HN gets more like reddit everyday and you can tell it's the reddit sentiment in this thread that's taken over
qoez
OpenAI uses scale via eg data made by humans through outlier. Part of this move could probably be seen as starving competition from data as much as buying talent at scale.
ml-anon
Every frontier lab has moved (or is moving) away from scale to other vendors/platforms/bespoke solutions.
meroes
Doesn't scale contract out/aggregate many smaller companies, and that's where the bespoke solutions are?
edmundsauto
How do you know this?
laborcontract
One can only guess but if they were so subscribed with their existing clients why have they started focusing on much on government contracts?
neom
I was looking for side angles also. Thinking the size of the deal gives substantial information rights, so there is likely good visibility into competitors surface areas.
https://archive.md/vuq7u