Scale AI’s life after Meta deal has been rocky, but CFO insists it’s not a ‘zombie company’
Scale AI CFO Dennis Cinelli.
Courtesy of Scale AI.
After Meta shocked the tech world in June by announcing plans to invest $14.3 billion in Scale AI, primarily as a way to hire the startup’s founder, Alexandr Wang, and a handful of his employees, the future of Scale was immediately thrown in doubt.
OpenAI soon disclosed that it had been winding down its work with Scale, which prepares the data that artificial intelligence labs and big tech companies use to train their models. Companies including Google and Elon Musk‘s xAI also paused work with Scale after the deal, according to multiple media reports.
But almost five months after the blockbuster announcement, Scale AI CFO Dennis Cinelli has a very different message to share. The 1,000-plus person company, he says, is alive and well.
“People mischaracterize this deal as some sort of acquihire or some sort of licensing deal, which is not true,” Cinelli, who joined Scale in 2022, told CNBC in an interview. “We’re a company that has signed some of the best deals we have had in the history of our company, just in the last two, three months.”
Founded in 2016, Scale is best known for its data business where it competes with companies including Appen, Surge AI and Mercor. Scale also has an applications business that creates custom solutions to help governments and large enterprises deploy AI. The U.S. Department of Defense signed a $99 million contract with Scale in August, followed by another $100 million contract in September.
Cinelli, 42, said both parts of the business are growing and bringing in revenue that’s “well into the nine figures,” though he declined to share more specific revenue numbers. The startup generated close to $1 billion in revenue last year, before the Meta deal, a spokesperson told CNBC in August.
Whether Scale has a viable path forward has been a big topic in Silicon Valley. The Meta transaction was lumped in with a number of acquihires that have taken place in the industry, though at a notably higher price. Since early last year, Microsoft, Amazon and Google have each orchestrated deals to bring in top AI talent and license certain technology without having to face the regulatory hassles that come with full-blown acquisitions.
In July, Google spent about $2.4 billion to hire Windsurf co-founder and CEO Varun Mohan and other senior research and development employees. The agreement didn’t include an investment and came with a nonexclusive license to some of Windsurf’s technology.
Already exited?
Greg Martin, who works on pre-initial public offering stock sales as managing director at Rainmaker Securities, called the Meta-Scale arrangement a “quasi-acquihire,” and said investors don’t know what to make of the company because “it doesn’t feel like it can go public anymore.” He said he’s seeing much more investor interest in names like Anthropic and xAI.
“People don’t truly understand what the future exit is for Scale,” Martin said. “Or did it kind of already have its exit?”
Scale has been trying to convince potential investors, employees and customers otherwise.
Jason Droege, who was promoted to interim CEO at Scale from strategy chief following Wang’s departure, said in a blog post days after the deal was announced that the startup wasn’t pivoting or “winding down.”
FILE PHOTO: Jason Droege speaks at the WSJTECH live conference in Laguna Beach, California, U.S. October 22, 2019.
Mike Blake | Reuters
Cinelli said that Scale continues to work with “all the major AI labs and tech companies,” though he declined to comment on specific customers.
“We had conversations, everyone had questions, naturally,” he said. “We’re still an independent company, we’re not captive to Meta, we’re still in business with all our customers. Once we’ve gone through those conversations, I think everyone kind of understood.”
OpenAI, Google and xAI are not currently listed as customers on Scale’s website, and representatives from the companies didn’t respond to CNBC’s request for comment. Meta is named as a client.
Scaling after Wang
Wang, who’s now 28, became the world’s youngest self-made billionaire by building Scale, though he lost that title to Polymarket founder Shayne Coplan, 27, in October, according to Forbes. Wang’s departure was a big loss for the company, but Cinelli said the “vast majority” of employees are still there.
With its investment, Meta has a 49% stake in a company valued on paper at $29 billion. But Meta has no voting power, a Scale spokesperson told CNBC in June, and there’s no product integration between the two companies.
Cinelli said Scale’s data business has grown every month since the Meta deal, and its applications business has doubled in the second half of 2025 compared with the first half. Scale expects the applications unit to be the primary revenue driver for the company in the future, Cinelli said.
Still, Scale has resized. In July, Droege shared that the company was laying off 200 full-time employees, or roughly 14% of its workforce.
“These changes will make us more nimble — enabling us to react more quickly to shifts in the market and customer needs,” Droege wrote in a memo at the time.
On Tuesday, Scale said it’s looking to hire 200 people for new roles across all areas of the business. The company is also expanding to larger offices in New York, Washington, D.C., St. Louis and London.
Scale’s largest hub is in San Francisco, where it occupies about 180,000 square feet of space that was previously used by Airbnb.
“We’re doubling down on growth,” Cinelli said.
Scale still has a long way to go to justify its latest valuation, which is more than double its $13.8 billion value from its last fundraise in 2024. Cinelli said he’s confident the issue will “solve itself.”
The company has $1 billion on the balance sheet, Cinelli said, so it doesn’t need to raise more money anytime soon. Scale also has a new focus, which Cinelli said has helped in recruiting, pushing its offer acceptance rate to the highest ever.
Under Wang’s leadership, Scale’s mission was to “strengthen human sovereignty.” In an all-hands meeting in September, Droege introduced a new mission — “to develop reliable AI systems for the world’s most important decisions,” according to a spokesperson.
Cinelli said it all adds up to a trajectory that stands in stark contrast to public perception.
“The results we’re putting up, it’s not a company that’s like a zombie company,” he said.
WATCH: What Meta’s Scale AI deal reveals about the battle for top AI talent
Technology
Musk’s Starlink rival Eutelsat shares plummet 7% after report of SoftBank cutting its stake
French satellite group Eutelsat, often seen as Europe’s answer to Elon Musk’s Starlink, saw its share price plummet Wednesday following a report that Japanse investor SoftBank cut its stake in the company.
Shares in Eutelsat were last trading 7.8% lower as of 6:00 a.m. ET.
The moves come following a Reuters report that SoftBank has sold 36 million rights, corresponding to around 26 million shares and around half their stake in the satellite operator.
Eutelsat is the owner of the satellite internet provider OneWeb, which it merged with in 2023 in a bid to challenge Starlink’s dominance in the market.
But the French group has struggled to tap into the U.S. company’s market share. Eutelsat currently has more than 600 satellites in orbit compared to Starlink’s over 6,750, according to the companies’ websites.
After soaring more than 600% in early March this year, as Europe scrambled to bolster its tech sovereignty in the wake of the U.S. cutting military support to Ukraine, Eutelsat shares have since dropped more than 70%.
The company is seen as crucial to Europe’s tech sovereignty ambitions. In June the French state led a 1.35 billion euro ($1.57 billion) investment in Eutelsat, becoming its biggest shareholder with a roughly 30% stake.
Tech sovereignty
In November SoftBank said it had sold its entire stake in U.S. chipmaker Nvidia as it looked to free up funds for its investment in OpenAI and other projects.
SoftBank wouldn’t have made the move if it didn’t need to bankroll its next artificial intelligence investments, founder Masayoshi Son said on Monday at an event.
The Japanese giant’s Eutelsat move mirrors its “aggressive monetisation” across its portfolio, Luke Kehoe, analyst at Ookla, told CNBC.
“With governments and strategic European investors, not SoftBank, now funding the recapitalisation, Eutelsat is becoming less a growth story and more a pillar of Europe’s digital sovereignty infrastructure.”
While Starlink is holding on to its scale advantage and is dominant in retail broadband, Eutelsat is carving out a niche in government, aviation, backhaul and emergency connectivity, said Kehoe.
“The open question is whether that higher-value, B2B-centric positioning can deliver attractive returns once the current wave of capex and recapitalisations is behind it, and whether Europe is willing to keep writing cheques at the scale required to narrow the gap with Starlink.”
Eutelsat and SoftBank have been approached for comment.
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