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Scale AI
Scale AI (Scale) is an artificial intelligence (AI) company headquartered in San Francisco, California. The company provides labeled data used to train AI applications. BackgroundScale was founded in 2016 by Alexandr Wang and Lucy Guo who had previously worked at Quora.[1] When the company was first conceived, it supplied human labour to perform tasks that algorithms could not. Accel partner Dan Levine offered to provide $4.5 million in seed funding to Scale and his basement as a temporary headquarters. Within months, Wang and Guo realized Scale could fill the needs for autonomous vehicle (AV) companies by being able to review and label its driving footage data used to train their AI applications. Other investors of Scale included Dragoneer Investment Group, Tiger Global Management and Index Ventures.[2][3][4] In 2018 Guo left Scale "due to differences in product vision and road map".[2] AV-related companies are the main source of revenue for Scale. According to a June 2019 fundraising pitch deck seen by Forbes, Scale was on track to have an annual revenue over $40 million.[2][3] In August 2019, after Peter Thiel’s Founders Fund made a $100 million investment in Scale, its valuation exceeded $1 billion and it acquired Unicorn status.[2][3] By July 2021, Scale had reached a valuation of $7 billion. There was an increased demand for data labelling from clients in different industries.[4] In January 2023, Scale laid off 20% of its workforce.[5] In March 2024, Scale reached a valuation of almost $13 billion after Accel lead another round of funding.[6] In May 2024, Scale raised an additional $1 billion with new investors including Amazon and Meta Platforms. Its valuation reached $14 billion.[7] Military affiliationScale also has been serving clients in the government such as the United States Armed Forces. Scale has pitched itself as a company that will assist the U.S. military in its existential battle with China by offering to pull better insights out of data, build better AVs and even create chatbots that can help advise military commanders during combat. Wang, who describes himself as a "China hawk," stated the U.S. will not be able to maintain its technological edge over the rising military power of China without AI developed by private technology companies. He was partially influenced by a trip to China in 2018 to see its AI scene and noted how the government there could use commercial technology for its own benefit.[1][8] In January 2022, Scale was award a $249 million contract by the U.S. Department of Defense to Accelerate Government's AI Capabilities.[2][1][8] In the fall of 2022, Scale planned to enter a deal with TikTok where it would provide insights for its advertisers. Despite opposition, Wang pushed for the deal to go through as the commercial opportunity was too good to turn down. However, the deal was eventually scrapped due to national security concerns.[8] As of February 2024, Scale has made almost $80 million from government related contracts.[8] RemotasksAs the demand for data labeling from AV increased, Scale found it harder to keep up with the demand for human labour. Initially Wang turned to outsourcing agencies but the cost quickly increased. Gross margins were around 65% in early 2018 and had decreased to 30% by the fourth quarter of the year.[2] In 2017, Scale established Remotasks as its in-house outsourcing agency. It set up over a dozen facilities in Southeast Asia and Africa to train thousands of data labelers. Remotasks has been established as a separate brand for client confidentiality according to Scale. Early employees say this was done to make Scale's strategy less obvious to competitors and shield the company from scrutiny.[2] Remotasks was successful in controlling costs and by mid-2019, Scale's margins had recovered to 69%.[2] According to a 2022 study by University of Oxford researchers, it concluded Remotasks met the "minimum standards of fair work" in just 2 of 10 criteria. It noted that the "obfuscation" of its association with Scale creates confusion that "can contribute to workers’ vulnerability to exploitation." The Lead researcher Kelle Howson compared Remotasks to garment factory workers in the same countries stating "There is pretty much zero accountability for those working conditions".[2][9] In August 2023 The Washington Post released an article on Remotasks' presence in the Philippines. It stated that Scale paid workers at extremely low rates, routinely delayed or withheld payments and provided few channels for workers to seek recourse. Freelance review has to go through several layers of review and only after approval are payments credited to workers through platforms like PayPal. Payments can be withheld with no explanation and if work is rejected, the workers can be asked to redo the work with little to no payment at all.[9] Remotasks pays workers on a task-to-task basis without any contract binding them to the company, which means workers often have few reliable ways to contact supervisors or escalate complaints. An employee has stated he was locked out of his account after raising a complaint to his supervisor about the number of tasks he'd completed without receiving payment.[9][10] In March 2024, it was reported that Remotasks had terminated its services in whole countries without explanation. Workers in Kenya, Nigeria, and Pakistan found themselves cut off from accessing its services. Remotasks has also halted new sign-ups in Thailand, Vietnam, and Poland. A Remotasks representative claimed an administrative error was to blame for the lack of notice provided to contractors in Kenya.[10] See alsoReferences
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