Meta’s deal to partially acquire the AI startup Scale, giving it 49% ownership, is certainly unusual.
What Scale officially announced is that the deal values the company at over $29 billion and that it will “distribute” proceeds to shareholders and vested equity holders (aka employees) granting them with “substantial liquidity” while allowing them to continue as shareholders.
Meta is also hiring Scale’s famed founder CEO Alexandr Wang, who famously dropped out of MIT at age 19 to build the company, which offers AI training data verified by humans.
This might sound like Meta would buy shares from existing shareholders, but that’s not the case, sources told Bloomberg. Investors are getting dividends, TechCrunch has confirmed. For instance Accel, which backed the company early, should get a payout of $2.5 billion, Bloomberg reports. (Accel declined comment.)
Scale has dozens of backers, including Amazon and Meta, and was last valued at $14 billion after raising a $1 billion Series F a year ago. So a dividend payout of this magnitude is almost like buying the company. We’ll have to wait and see if regulators agree.