Data labelling company Surge AI is reportedly in the process of raising up to $1bn in its first capital raising initiative, targeting a valuation that exceeds $15bn.
According to a report by Reuters, this move comes as the company capitalises on increased user demand, coinciding with customer departures from its competitor, Scale AI.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
Sources close to the discussions informed the publication that negotiations are still at an early stage, with potential adjustments to the final valuation possible.
The funding will involve both primary and secondary components, providing liquidity options for employees. Surge AI has engaged advisers in this regard.
Founded by Edwin Chen, a former Google and Meta engineer, Surge AI is said to have been profitable since its inception in 2020 and has operated without previous external investment.
The company focuses on data labelling, a process that involves annotating or tagging data, such as text and images, to make it interpretable by machines. This labelled data is subsequently utilised to train AI models.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataLast year, the US-based startup reported more than $1bn in revenue, surpassing its rival Scale AI’s revenue of $870m during the same timeframe.
In comparison, Scale AI was recently valued at nearly $29bn following a significant investment from Meta Platforms. This development also saw Scale AI’s CEO Alexandr Wang join Meta as chief AI officer.
Surge AI’s current momentum is partly due to Scale AI’s loss of key clients such as OpenAI and Google, Reuters reported. These companies are reportedly moving away from Scale AI due to concerns about exposing research priorities to Meta.
Despite this shift, Scale AI has asserted that its business operations continue to be strong and reiterates its dedication to safeguarding customer data.
Surge AI’s data labelling services are reportedly used by major AI research organisations, including Google, Anthropic, and OpenAI. As reinforcement learning from human feedback (RLHF) becomes more crucial in the development of advanced AI systems, the need for accurately labelled datasets is growing.
Meanwhile, Scale AI has expanded its collaboration with Meta through the latest investment round, which enhances their commercial relationship and accelerates the deployment of its data solutions.
