Scale AI Gets A $325M Series E Funding Infusion to Grow Its Data Annotation Mission 

Data annotation and labeling startup Scale AI is taking in another $325 million in new investment, this time through a Series E round.

The San Francisco-based company, which was founded in 2016, works to help enterprises annotate or label their stores of data so it can be used more effectively to drive business growth while using their data resources more effectively.

The latest Series E funding round was announced April 13 (Tuesday) in a blog post by Scale AI CEO Alexandr Wang. The new funding round was co-led by Dragoneer, Greenoaks Capital and Tiger Global, and included new investors Wellington Management and Durable Capital. Several previous investors, including Coatue, Index, Founders Fund and YC, were also involved, according to the company.

Alexandr Wang, CEO of Scale AI

“The interest and opportunity for AI is only accelerating, and this new funding will help us continue to expand our team and products to meet this growing demand,” wrote Wang in his blog post.

Scale AI’s work centers on providing a systematic, data-centric approach to help customers rapidly and efficiently deploy their most important models, wrote Wang.

“At Scale, we’re building the foundation to enable organizations to manage the entire AI lifecycle,” he wrote. “Whether they have an AI team in-house or need a fully managed models-as-a-service approach, we partner with our customers to build their strategy from the ground up and ensure they have the infrastructure in place to systematically deliver highly-performant models.”

Data annotation or labeling in machine learning means identifying raw data in its various forms and then adding descriptive labels to help machine learning models identify the information and properly parse, use and learn from it.

Wang and Scale AI did not provide additional details about the funding round by press time, despite several emailed requests from EnterpriseAI.

In December, Scale AI brought in an earlier $155 million Series D investment round which at the time gave it a valuation of about $3.5 billion, according to the company.

Last August, the company launched its Nucleus application, which Scale AI says is built to enable collaboration across the AI development cycle. Using Nucleus, companies can visualize and organize their datasets, test and compare models and then share data with colleagues.

Neil Mehta, the founder and managing partner at Greenoaks Capital, said in a statement that his company invested in the latest funding round in reaction to the continuing growth in AI technologies and customer needs.

“The AI industry is at an inflection point where every business is looking to implement an AI strategy and we are starting to see a real-world impact,” said Mehta. “We believe Alex and his team at Scale have been critical to enabling businesses across industries reap the full benefits of AI and are taking the industry from proof of concept to reality.”

Scale AI wasn’t the only AI company with big investment news this week.

AI and ML accelerator startup, Groq Inc., today (April 14) announced the closing of a $300 million Series C fundraising round that has been rumored for more than a month. Co-led by Tiger Global Management and D1 Capital, with participation from The Spruce House Partnership and Addition, the cash brings Groq's total funding to $367 million, of which $300 million has been raised since the second-half of 2020, according to the company.

And on April 13 SambaNova Systems announced that it is getting another $676 million in new funding, which it says it will use to directly take on AI market leader Nvidia. With the latest large cash infusion, SambaNova says it now has total funding of more than $1 billion and a valuation above $5 billion.

Karl Freund, analyst

Karl Freund, the principal analyst at Cambrian AI Research, told EnterpriseAI that these large investments in AI startups lately are not a surprise.

“Projections for AI silicon alone are heading north of $25 billion in 2025 these days, and Nvidia data center revenue grew to $1.9 billion last quarter, up 97 percent from a year ago,” said Freund. “In spite of interesting companies garnering billions of dollars in venture capital, none are materially challenging Nvidia yet. But everyone is betting the industry needs more than a single vendor to spur innovation and put a lid on prices.”

At the same time, anything can happen in this volatile and growing marketplace, said Freund. “The Cambrian Explosion in AI is just entering the second inning, so grab some popcorn and a beer and hang on tight!”