Ryan Kolln interview

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    Meta's Scale AI Investment Could Lift Other Data Annotators — Interview

    Jun 23, 2025, 16:07 GMT+102 min read

    APX−5.83%
    By Stuart Condie
    SYDNEY--Meta Platforms' investment in Scale AI has thrown a spotlight on the important role that data-annotation providers play in training artificial-intelligence models. It could also lead to extra business for some of Scale's rivals.
    Meta this month made one of its largest outside investments to acquire a stake in Scale that valued the startup at more than $29 billion, bringing across its founder to work on its AI efforts.
    Scale AI didn't disclose the size of the investment, but The Wall Street Journal reported that Meta was looking to invest around $14 billion, which would give it a 49% stake.
    The move highlights the value of the work done by Scale and others in sifting and annotating the vast amounts of data used to train the powerful AI models developed by tech giants.
    It might also lead to new contracts for some smaller providers if companies want to keep a distance from the social-media giant, said Ryan Kolln, chief executive of Australia-listed data annotator Appen.
    "I think what we'll find is that Meta's competitors are significantly less willing to work with Scale because of their close association with Meta," Kolln said last week.
    "How Appen thinks about it, and I think broadly the remainder of the industry, is that there's going to be a pretty significant set of opportunities with Meta's competitors to fill the hole that's going to be left."
    Scale AI said that any worries about privacy being compromised are unfounded and that demand for its services remains strong.
    The nine-year-old San Francisco-based startup manages more than 100,000 contractors from across the world who label images, write sentences and type out stories that help AI chatbots learn how to think and speak like humans.
    "Nothing has changed about our commitment to protecting customer data," the company's interim CEO, Jason Droege, wrote in a blog post published last week. "Scale remains a well-resourced company, with multiple promising lines of business."
    Droege became interim chief when founder Alexandr Wang joined Meta as part of the deal. Scale said Wang would continue to sit on its board but won't be involved in day-to-day management, including any customer or contributor operations.
    Meta didn't respond to a request for comment.
    Whatever customers do, Meta's investment in Scale should be seen as a significant boost for the data-annotation industry, said Kolln. This view is shared by others, including Massachusetts-based Lionbridge.
    "The investment is a validation of the size of the market, as demand for AI-related data services has significantly increased. Meta also operates at a different scale than most," Lionbridge CEO John Fennelly said.
    Appen knows what it is like to lose a large customer suddenly. For years, it relied on Meta's Facebook, Alphabet's Google, Microsoft, Apple and Amazon.com for 80% of its revenue, so it was hit hard when some of them cut back on new projects during the pandemic.
    The low point came in early 2024, when Google canceled a contract that generated $82.8 million of Appen's $273.0 million revenue the previous year. The sudden move prompted its CEO to quit, Kolln's promotion, sharp cost reductions, and the most recent in a series of capital raises.
    Write to Stuart Condie at [email protected]
 
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