Scale AI is losing major clients hours after Meta’s huge $14.3 billion investment.
Google has paused multiple projects with Scale AI, sources tell Business Insider. Contractors say Google work has been drying up for months, and multiple ongoing projects, including codenamed "Genesis" and "Beetle Crown," got paused abruptly right after Meta announced its deal on June 12.
OpenAI and Elon Musk’s xAI have also put some Scale AI projects on hold. Contractors report dashboards showing far fewer available projects. One OpenAI contractor said their work halted last week without explanation. 
A smaller investor in Scale AI is cashing out, skeptical Meta’s cash infusion can offset losing top customers like Google.
This all stems from Meta buying 49% of Scale AI and hiring founder Alexandr Wang. Meta’s rival status threatens Scale’s relationships with Big Tech clients that rely on its data-labeling services to train AI models.
Scale AI’s interim CEO Jason Droege insists the company remains independent with “multiple promising lines of business.”
“As a whole, the nature of this business naturally fluctuates and dips do not imply a change in the relationship,” Scale AI spokesperson said.
In a blog post, Droege added Scale won’t share confidential customer info with Meta, pushing back on privacy fears.
Google declined to comment. OpenAI confirmed it’s winding down work with Scale. xAI and Meta didn’t respond to requests.
Google was Scale AI’s biggest customer last year, accounting for almost 20% of the startup’s revenue, spending $150 million. Now, Google’s exit could hit Scale hard. Contractors say these changes are sudden and poorly communicated, leaving many without projects overnight.
Scale AI’s internal April dashboard showed over a third of its generative AI projects tied to Google. That’s disappearing fast.
Contractors on xAI’s “Xylophone” chatbot project also saw pauses post-Meta deal. One recounted:
"Long story short, I am now in a state where I have been told that there are no projects for my specialty or location."
One OpenAI contractor put it bluntly:
"You can put two and two together."
Meta’s deal promises “substantial expansion” of its relationship with Scale AI — but it’s unclear that will make up for lost business. Competitors seem ready to take Scale’s bleeding clients.
One rival CEO told BI they’re already seeing an influx of former Scale users. Meanwhile, a Scale AI investor criticized the company’s $29 billion valuation, questioning how it holds up after Google’s pullout.
