AI Bubble Watch as Meta Goes Big with $14.3 Billion

Meta Platforms (META) is investing $14.3 billion in Scale AI. As a result of the deal, Scale AI’s founder, Alexandr Wang, will leave the firm to work for Meta.Meta will take a 49% stake in the firm. Although the exact financial terms were not disclosed, Meta said the deal deepens the work on AI models between the two firms. Meta’s primary motivation for the deal was getting Wang to lead the superintelligence segment.Meta needs Wang. The firm lost key leaders and resources. This risked setting the firm behind in its efforts to build open-source AI models. This race forces Alphabet (GOOG) through Gemini and Microsoft (MSFT) through CoPilot to continue their investments.Firms like CoreWeave and Nvidia (NVDA) benefit from Meta’s big investment. They sell the hardware that powers AI.Software firms need to continue their investments in AI or risk falling behind. Adobe (ADBE) continued to add AI solutions to its software with Firefly. In cybersecurity, CrowdStrike (CRWD) offers AI-driven solutions. This included Charlott AI and SIEM. Those solutions offer automated threat detection in the cybersecurity market.Chinese firms would need to catch up to Meta, too. Tencent (TCEHY), Alibaba (BABA), JD.com (JD), Huawei, and Xiaomi are some of the firms that invest billions in AI.