How to invest in Scale AI, the startup financed by Nvidia, Amazon and Meta

29 May 2024 - 15:00

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With a valuation of almost $14 billion, it is one of the most relevant success stories in the contemporary technology startup landscape. Here’s how to buy Scale AI stocks.

How to invest in Scale AI, the startup financed by Nvidia, Amazon and Meta

Scale AI, one of the most promising startups in the field of artificial intelligence, recently announced that it has raised $1 billion in a late-stage funding round, led by Accel and supported by tech giants like Nvidia, Amazon and Meta.

This financing brings the company’s valuation to nearly $14 billion.

How much is Scale AI worth?
Source: Stock Analysis

The growing demand for AI and machine learning solutions has made startups in this sector particularly attractive, despite a generally declining private financing market. Founded in 2016, Scale AI stands out for its ability to provide accurately labeled data, which is critical for training sophisticated AI tools like OpenAI’s ChatGPT .

Let’s see below how to invest in Scale AI, offering a detailed overview of the company itself.

How to invest in Scale AI

Investing in Scale AI, a privately held, non-publicly traded company, can be complex for retail investors. Most investment opportunities are reserved for accredited or institutional investors, who can access these companies through venture funds, investment funds, or pre-IPO markets like Hiive.

To qualify as an accredited investor, you must meet certain criteria, including an annual income of at least $200,000 ($300,000 joint) or a net worth greater than $1 million, excluding the main residence. Qualified financial professionals may also fall into this category.

Non-accredited investors can seek indirect exposure to Scale AI by investing in its publicly traded clients. Companies such as Microsoft, Nvidia, Meta, PayPal, Toyota , and General Motors partner with Scale AI and could benefit from its advanced artificial intelligence. Additionally, you can invest in AI and robotics-focused Exchange-Traded Funds (ETFs), which offer broader sector coverage, although they do not provide direct exposure to Scale AI.

Some relevant ETFs include:

  • the Global X Artificial Intelligence & Technology ETF (AIQ),
  • the First Trust Nasdaq Artificial Intelligence and Robotics ETF (ROBT),
  • the WisdomTree Artificial Intelligence and Innovation Fund (WTAI),
  • the ROBO Global Artificial Intelligence ETF (THNQ).
AIQ weekly graph
Source: Tradingview

Another option for investors is to monitor Scale AI’s major competitors, such as Sama, Labelbox and Cloudfactory, which are also active in the field of data labeling and the accuracy of the models. Even if it is not possible to invest directly in these companies at the moment, their performance can provide useful indications of the state of the market and future opportunities.

What is Scale AI

Scale AI is a artificial intelligence company based in San Francisco, founded in 2016 by Alexandr Wang, then nineteen years old. Specializing in data annotation, Scale AI supports the development of artificial intelligence models by providing high-quality, precisely labeled data. This process is crucial for training advanced AI models used in applications such as autonomous driving, robotics, and computer vision.

Scale AI’s platform combines the human workforce with machine learning algorithms to ensure data is annotated accurately and efficiently. This hybrid approach allows the company to offer scalable solutions that meet the needs of both startups and large enterprises.

Scale AI customers include big names like Microsoft, Morgan Stanley, OpenAI , and Cohere, who rely on its services to create and refine sets of crucial data for their artificial intelligence projects.

The company has played a significant role in the AI ecosystem, providing the foundational data infrastructure needed for machine learning applications. Scale AI has risen to prominence due to its ability to provide labeled data with a level of accuracy that is essential for training AI models. This has been particularly relevant in the context of the exponential growth of AI applications and the growing need for high-quality data.

The strategic role of Scale AI

One of Scale AI’s distinguishing factors is its collaboration with high-profile institutions and enterprise clients. The recent funding round not only strengthens its financial position but also allows the company to expand its capabilities and resources. Scale AI announced that it will use the capital raised to expand data management capacity for its enterprise customers, including projects with the U.S. Department of Defense. Additionally, the company will participate in key events such as the DEFCON 31 red-teaming, a White House-led initiative to ensure safe AI innovation.

The presence of high-profile investors such as Coatue, Tiger Global Management, Intel Capital and AMD Ventures also underlines scale AI’s strategic importance in the sector. This group of investors not only provides financial support, but also contributes extensive experience and expertise in the technology and investment field.

Scale AI continues to grow in a market characterized by intense competition, however, Scale AI’s ability to integrate artificial intelligence with human intervention to improve the quality of labeled data gives it a significant competitive advantage. This innovative methodology allows it to effectively respond to the rapidly evolving needs of its customers.

The information and considerations in this article should not be used as the sole or primary basis for making investment decisions. The reader maintains full freedom in his own investment choices and full responsibility in making them, since he alone knows his risk propensity and his time horizon. The information contained in the article is provided for informational purposes only and its disclosure does not constitute and should not be considered an offer or solicitation to the public for savings.|

Original article published on Italy 2024-05-27 18:09:02. Original title: Come investire in Scale AI, la startup finanziata da Nvidia, Amazon e Meta

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