AI CEO Alex Wang, left.
Artificial intelligence start-up Scale announced on Tuesday that it raised $ 155 million, led by Tiger Global. It is now worth over $ 3.5 billion.
AI has been around for decades, but building an AI model that does what it should do isn’t always quick or easy. Part of the hardship is to enrich the raw data so that the model can learn accurate predictions. Scale AI, established in 2016, specializes in carrying out these works for its clients. Customers include Airbnb, General Motors, Nvidia, OpenAI, Pinterest, and DoorDash.
The artificial intelligence market is not as large and easy to understand as the market for, say, social media. It comes down to assistive technology such as database software in the sense that AI can be built into existing products. Still, it is a real and growing market.
Unveiling its plan to go public last month, C3.ai, a company eager to trade under the “AI” symbol, IDC estimates the enterprise AI software market will be worth $ 44 billion in 2024, up from $ 18 billion in 2020. Software developers continued to source AI tools through acquisitions. For example, ServiceNow announced on Monday its acquisition of the growing, industry-oriented start-up Element AI.
“In 2014 or 2015, many of these things started to gain momentum,” said Scale founder and CEO Alex Wang on Monday. “It is such a prolific new industry for us that we can operate in, and it has grown so rapidly in the last few years.”
The scale can handle a variety of data sent to it by customers. Contractors review the data and annotate them if necessary. For example, performers can view photos and count the cars in each photo. A model that has been trained on this refined data can then evaluate the new photo and estimate the number of cars present.
There are other opportunities to breed these jobs, including Australian firm Appen, which acquired the start-up Figure Eight for $ 300 million in 2019. There is also a 15-year service from Amazon called Mechanical Turk that gets small jobs done for many employees. Wang said Scale strives to excel by focusing on delivering very high quality data and solving technology problems at scale.
Scale, which charges fees based on the amount of data processed for customers, has grown significantly thanks to its partnership with DoorDash. The delivery service has seen accelerated growth this year as people order food supplies during the coronavirus pandemic. “Honestly, we’re just trying to keep up,” said Wang.
San Francisco-based Scale has tried to be more conservative with its money as the pandemic caused a recession in the US.
“I think we were lucky,” said Wang. “We were mostly less aggressive than we intended.” The company has slowed its recruiting pace, he said. The idea is to remain helpful to their customers – Wang doesn’t want the company to just disappear one day.
Scale is now breaking even though it more than doubled its year-on-year annual revenue realization in the third quarter. Wang declined to say how much the company earns.
The company’s financial situation allows it to make its own investments. For example, Scale said on Tuesday it is acquiring Helia AI, a start-up that creates software to help companies run AI models on real-time video streams. The team consists of people who worked on the Tesla Autopilot system.
“There is some level of vision and experience in working with large-scale machine learning problems that we can gain from the acquisition,” said Wang.
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