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Mark Zuckerberg arrives before the inauguration of Donald Trump as the 47th president of the United States takes place inside the Capitol Rotunda of the U.S. Capitol building in Washington, D.C., Monday, Jan. 20, 2025.

Kenny Holston | Via Reuters

Mark Zuckerberg is so frustrated with Meta’s standing in artificial intelligence that he’s willing to spend billions of dollars to convince Scale AI CEO Alexandr Wang to join his company, people familiar with the matter told CNBC. 

Meta is finalizing a deal to invest $14 billion into Scale AI, according to a person familiar with the matter who asked not to be named because the terms are confidential. Bloomberg reported earlier this week that an investment could top $10 billion, and a story from The Information on Tuesday said Meta would pay close to $15 billion.

As a founder of one of the most prominent AI startups, Wang has built a reputation as an ambitious leader who both understands AI’s technical complexities and how to build a business that’s not merely focused on research, according to two former Meta AI employees who agreed to speak on the condition of anonymity. Zuckerberg will be counting on Wang to better execute Meta’s AI ambitions following the lukewarm launch of the company’s latest Llama AI models.

By not directly acquiring Scale AI, Meta appears to be taking a similar strategy as companies like Google and Microsoft, which have brought in prominent leaders in AI from the startups Character.AI and Inflection AI by taking large stakes in those companies rather than buying them outright. Meta is currently on trial against the Federal Trade Commission for antitrust claims, and the company doesn’t want to further upset regulators by acquiring Scale AI, multiple people familiar with the matter said.

As part of the deal, Meta will take a 49% stake in the data-labelling and annotation startup, The Information reported, while Wang will help lead a new AI research lab at the social networking company and will be joined by some of his colleagues. The New York Times was first to report about the new AI lab.

Alexandr Wang, CEO of ScaleAI speaks on CNBC’s Squawk Box outside the World Economic Forum in Davos, Switzerland on Jan. 23, 2025.

Gerry Miller | CNBC

Scale AI, founded in 2016, has made a splash in the era of generative AI by helping major tech companies like OpenAI, Google and Microsoft prepare data they use to train cutting-edge AI models. Meta is one of Scale AI’s biggest customers, according to two people familiar with the matter.

The startup, valued in a funding round about a year ago at $14 billion, is number 28 on CNBC’s Disruptor 50 list. In mid-2024, the company signed one of the biggest recent commercial leases in San Francisco, gobbling up about 180,000 square feet of space in a downtown building that had been occupied by Airbnb.

Scale AI has increasingly made in-roads into the defense industry, and in March announced a multimillion dollar deal with the Department of Defense. In November, it collaborated with Meta on Defense Llama, a custom version of Meta’s open-source Llama foundation model designed specifically to “support American national security missions,” the company said in a blog post.

Meta and Scale AI declined to comment.

Meta’s AI challenges

Heading into 2025, AI was one of Meta’s top priorities. But Zuckerberg has grown agitated that rivals like OpenAI appear to be ahead in both underlying AI models and consumer-facing apps, current and former Meta employees said.

Zuckerberg has been deprioritizing its Fundamental Artificial Intelligence Research unit, or FAIR, in favor of its more product-oriented GenAI team to help Meta make headway in AI and improve its Llama family of AI models, CNBC previously reported.

Meta’s release of its Llama 4 AI models in April was not well received by developers, further frustrating Zuckerberg, the people said. At the time, Meta only released two smaller versions of Llama 4 and said it would eventually release a bigger and more powerful “Behemoth” model. 

That model has yet to be made available due to Zuckerberg’s concerns about its capabilities relative to competing models, the people said. In particular, there is concern about how Behemoth stacks up against the latest from companies like OpenAI and China’s DeepSeek, whose models are preferred by the wider developer community.

Following Llama 4’s lackluster debut, Meta conducted a reorganization of its GenAI unit, splitting it into two. Connor Hayes, a longstanding Meta employee, was put in charge of AI Products, while AGI Foundations was given to Amir Frenkel, previously a vice president of engineering and product for Meta’s Reality Labs hardware unit, and Ahmad Al-Dahle, the previous head of GenAI. 

Al-Dahle’s new position as a co-leader was seen as a sign that Zuckerberg had lost confidence in him, the people said.

Ahmad Al-Dahle, VP and Head of GenAI at Meta.

Courtesy: Meta

Zuckerberg admires Wang and considers him capable of a major role at Meta as an AI leader, the people said. A dropout from the Massachusetts Institute of Technology, Wang has built a sizable business and is familiar with AI’s technical intricacies. The people described Wang as a “wartime CEO” who is in line with Zuckerberg’s position that the U.S. faces increasing competition from China, thus requiring help from the tech industry.

Wang told CNBC in January that he believes there is an “AI war” between the U.S. and China, and that the U.S. will need more computing power in order to compete.

“The United States is going to need a huge amount of computational capacity, a huge amount of infrastructure,” Wang said at the time. “We need to unleash U.S. energy to enable this AI boom.”

It’s an unusual move for Zuckerberg, who has traditionally put loyalists in high-ranking positions. But it shows the magnitude of the moment and Zuckerberg’s belief that a prominent outsider like Wang may be better positioned than any current Meta employee to bolster the company’s position in AI, the people said.

Wang also brings a lot of outside knowledge of how competitors like OpenAI are building their consumer chatbots and AI models. Data labelling and training has become more complicated in recent years as the capabilities of AI models has increased, said Vahan Petrosyan, the CEO of SuperAnnotate, one of Scale AI’s competitors.

“I would say Scale have covered probably 70% of all the models that are built,” Petrosyan said. With Wang and others from Scale AI, Meta could gain “collective intelligence on how to build a better ChatGPT.”

“When Meta is buying them, they’re buying their intelligence,” Petrosyan said. 

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YouTube agrees to pay Trump $24.5 Million to settle lawsuit over suspended account

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YouTube agrees to pay Trump .5 Million to settle lawsuit over suspended account

U.S. President Donald Trump reacts, as he arrives at Joint Base Andrews, Maryland, U.S., September 26, 2025.

Elizabeth Frantz | Reuters

YouTube has agreed to pay $24.5 million to settle a lawsuit involving the suspension of President Donald Trump’s account following the U.S. Capitol riots on Jan. 6, 2021.

The settlement “shall not constitute an admission of liability or fault,” on behalf of the defendants or related parties, according to a filing on Monday from the U.S. District Court for the Northern District of California.

Trump sued YouTube, Facebook and Twitter in mid-2021, after the companies suspended his accounts on their platforms over concerns related to the incitement of violence.

Since Trump won a second term in November and returned to the White House in January, the tech companies have been settling their disputes with the president. Facebook-parent Meta said in January that it would pay $25 million to settle its lawsuit with Trump. The following month, Elon Musk’s X, formerly Twitter, agreed to settle its Trump-related case for roughly $10 million.

In August, several Democratic senators, including Elizabeth Warren of Massachusetts, sent a letter to Google CEO Sundar Pichai and YouTube CEO Neal Mohan expressing their concern over a possible settlement with the president.

The senators said in the letter that they worried such an action would be part of a “quid-pro-quo arrangement to avoid full accountability for violating federal competition, consumer protection, and labor laws, circumstances that could result in the company running afoul of federal bribery laws.”

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EA going private in $55 billion deal that will pay shareholders $210 a share

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EA going private in  billion deal that will pay shareholders 0 a share

Electronic Arts to be taken private by PIF, Silver Lake and Affinity Partners for $55B

Electronic Arts said Monday that it has agreed to be acquired by the Public Investment Fund of Saudi Arabia, Silver Lake and Affinity Partners in an all-cash deal worth $55 billion.

Shareholders of the company will receive $210 per share in cash.

EA stock climbed 5% Monday. Shares gained about 15% Friday, closing at $193.35, after the Wall Street Journal reported that the company was nearing a deal to go private.

PIF is rolling over its existing 9.9% stake in the company and will, by far, be the majority investor in the new structure, people close to the deal told CNBC’s David Faber.

Affinity CEO Jared Kushner, who is President Donald Trump‘s son-in-law, touted EA’s “bold vision ​for ​the ​future” in a release announcing the deal.

“I’ve admired their ​ability to create iconic, lasting experiences, ​and ​as ​someone ​who ​grew up playing their ​games ​- and now enjoys them with his ​kids – I couldn’t be ​more ​excited about ​what’s ​ahead,” Kushner said in a statement.

The group of companies is making a total $36 billion equity investment, with $20 billion in debt financing from JPMorgan, according to the release. JPMorgan was brought in a couple of weeks ago, people familiar with the deal told Faber.

Read more CNBC tech news

The take-private deal for the maker of popular games like Battlefield, The Sims and the Madden series of NFL games, among others, is set to be the largest leveraged buyout in Wall Street history.

In a note to employees, EA CEO Andrew Wilson said he is “excited to continue as CEO.”

“Our new partners bring deep experience across sports, gaming, and entertainment,’ he wrote. “They are committed with conviction to EA – they believe in our people, our leadership, and the long-term vision we are now building together.”

The deal is expected to close in the first quarter of fiscal year 2027.

There is a 45-day window to allow for other proposals, people familiar with the terms of the deal told Faber. The deal talks started in the spring, the people said.

Silver Lake, which is led by co-CEOs Egon Durban and Greg Mondre, is also one of the key investors in Trump’s push to get TikTok under U.S. control.

CNBC has reached out to EA for further comment and information on the deal.

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A look at OpenAI’s tangled web of dealmaking

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A look at OpenAI's tangled web of dealmaking

OpenAI CEO Sam Altman speaks to media following a Q&A at the OpenAI data center in Abilene, Texas, U.S., Sept. 23, 2025.

Shelby Tauber | Reuters

OpenAI CEO Sam Altman is everywhere.

His artificial intelligence startup, now valued at $500 billion, has been inking deals valued in the tens to hundreds of billions of dollars with infrastructure partners, even as it continues to burn mounds of cash.

Those expenditures are driving the market.

The Nasdaq and S&P 500 rose to record highs this week after Nvidia agreed to invest up to $100 billion in OpenAI. That followed a $300 billion deal between OpenAI and Oracle in July as part of the the Stargate program, a $500 billion infrastructure project that’s also being funded by SoftBank.

Its commitments don’t stop there. CoreWeave on Thursday said it’s agreed to provide OpenAI up to $22.4 billion in AI infrastructure, an increase from the $11.9 billion it initially announced in March. Earlier this month, chipmaker Broadcom said it had secured a new $10 billion customer, and analysts were quick to point to OpenAI. 

While OpenAI says that scaling is key to driving innovation and future AI breakthroughs, investors and analysts are beginning to raise their eyebrows over the mindboggling sums, as well as OpenAI’s reliance on an increasingly interconnected web of infrastructure partners. 

OpenAI took a $350 million stake in CoreWeave ahead of its IPO in March, for instance. Nvidia formalized its financial stake in OpenAI by participating in a $6.6 billion funding round in October. Oracle is spending about $40 billion on Nvidia chips to power one of OpenAI’s Stargate data centers, according to a May report from the Financial Times. Earlier this month, CoreWeave disclosed an order worth at least $6.3 billion from Nvidia. 

And through its $100 billion investment in OpenAI, Nvidia will get equity in the startup and earn revenue at the same time.

OpenAI is only expected to generate $13 billion in revenue this year, according to the company’s CFO Sarah Friar. She told CNBC that technology booms require bold bets on infrastructure. 

“When the internet was getting started, people kept feeling like, ‘Oh, we’re over-building, there’s too much,'” Friar said. “Look where we are today, right?”

Altman told CNBC in August that he’s willing to run the company at a loss in order to prioritize growth and its investments. 

‘Troubling signal’

But some analysts are raising red flags, arguing that OpenAI’s deal with Nvidia is reminiscent of vendor financing patterns that helped burst the dot-com bubble in the early 2000s.

Nvidia has been the biggest winner of the AI boom so far because it produces the graphics processing units (GPUs) that are necessary to train models and run large AI workloads. Nvidia’s investment in OpenAI, which will be paid out in installments over several years, will help the startup build out data centers that are based around its GPUs. 

“You don’t have to be a skeptic about AI technology’s promise in general to see this announcement as a troubling signal about how self-referential the entire space has become,” Bespoke Investment Group wrote in a note to clients on Tuesday. “If NVDA has to provide the capital that becomes its revenues in order to maintain growth, the whole ecosystem may be unsustainable.” 

Sam Altman, CEO of OpenAI (L), and Jensen Huang CEO of Nvidia.

Reuters

Peter Boockvar, chief investment officer at One Point BFG Wealth Partners, said names of companies from the late 1990′s were ringing in his ears after the OpenAI-Nvidia deal was announced. 

A key difference, however, is that this transaction is “so much bigger in terms of dollars,” he wrote in a note.

“For this whole massive experiment to work without causing large losses, OpenAI and its peers now have got to generate huge revenues and profits to pay for all the obligations they are signing up for and at the same time provide a return to its investors,” Boockvar said.

An OpenAI spokesperson referred CNBC to comments from Altman and Friar this week, adding that the company is pursuing “a once-in-a-century opportunity that demands ambition equal to the moment.”

The total amount of demand for compute could reach a staggering 200 gigawatts by 2030, according to Bain & Company’s 2025 Technology Report. Building enough data centers to meet this anticipated demand would cost about $500 billion a year, meaning AI companies would have to generate a combined $2 trillion in annual revenue to cover those costs.

Even if companies throw their whole weight behind investing in the cloud and data centers, “the amount would still fall $800 billion short of the revenue needed to fund the full investment,” Bain said.

There’s a clear uphill battle ahead, but OpenAI’s Altman brushed off concerns on Tuesday, rejecting the idea that the infrastructure spending spree is overkill.

“This is what it takes to deliver AI,” Altman told CNBC. “Unlike previous technological revolutions or previous versions of the internet, there’s so much infrastructure that’s required, and this is a small sample of it.”

–CNBC’s Yun Li and MacKenzie Sigalos contributed to this report

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