Meta approached AI search startup Perplexity AI about a potential acquisition before ultimately investing $14.3 billion in Scale AI, according to sources familiar with the negotiations. The failed talks underscore CEO Mark Zuckerberg’s aggressive strategy to strengthen Meta’s AI capabilities amid intensifying competition with OpenAI and Google, as the company pursues multiple high-profile deals and talent acquisitions.
What you should know: The Perplexity discussions did not result in a deal, with sources offering conflicting accounts of how the talks ended.
- One person familiar with the matter described the outcome as “mutually dissolved,” while another said Perplexity walked away from the potential deal.
- Meta has since secured a 49% stake in Scale AI, a company that provides data services for training AI models, through its massive investment, though without voting power.
- Scale AI founder Alexandr Wang and select employees will join Meta as part of the agreement.
The big picture: Meta’s acquisition attempts reflect Zuckerberg’s frustration that rivals like OpenAI appear ahead in both AI models and consumer applications.
- The company also pursued Safe Superintelligence earlier this year, a startup valued at $32 billion in April.
- Daniel Gross, CEO of Safe Superintelligence, and former GitHub CEO Nat Friedman are joining Meta’s AI efforts under Wang’s leadership.
- Meta will receive a stake in NFDG, the venture capital firm run by Gross and Friedman.
Competitive tensions: OpenAI CEO Sam Altman revealed Meta’s aggressive recruitment tactics during a recent podcast appearance.
- “I’ve heard that Meta thinks of us as their biggest competitor,” Altman said on the “Uncapped” podcast hosted by his brother.
- Meta has offered signing bonuses as high as $100 million with even larger annual compensation packages to poach OpenAI employees.
- “Their current AI efforts have not worked as well as they have hoped and I respect being aggressive and continuing to try new things,” Altman noted.
Why this matters: Meta’s string of acquisition attempts and talent raids signals the company’s determination to close the perceived AI gap with competitors, even as it faces regulatory scrutiny over its market dominance in social media.
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