Startup Scale AI is seeking a valuation as high as $25 billion in a potential tender offer as it seeks to capitalize on investors' voracious demand for AI startups, according to multiple sources who have seen the deal.
The buzzy data-labeling startup was last valued at $13.8 billion in a $1 billion Series F funding round led by Accel last year.
A spokesman for Scale AI declined to comment.
A tender offer is when investors and or the company buy shares from existing shareholders. These deals have become increasingly popular as a way to give employees or early investors liquidity as startups take longer to go public or be acquired. Stripe recently announced a tender offer, valuing the fintech at over $90 billion.
Terms of the offering are still being negotiated, and the final valuation could change.
Scale AI, which was founded in 2016 by then-19-year-old MIT dropout Alexandr Wang, has become increasingly in demand as companies need to label and sort vast quantities of unstructured data to train machine learning models. Customers include OpenAI, Microsoft, and Meta.
Earlier this month, Scale AI announced a landmark contract with the Defense Department to help the military start to use AI agents to help with "operational decision-making."
Scale AI has already made Wang the world's youngest self-made billionaire, according to Forbes.
Aside from Accel, investors in Scale AI include Y Combinator, Nat Friedman, Index Ventures, Founders Fund, Coatue, Thrive Capital, Spark Capital, NVIDIA, Tiger Global Management, Greenoaks, Wellington Management, Cisco Investments, DFJ Growth, Intel Capital, ServiceNow Ventures, AMD Ventures, WCM, Amazon, Elad Gil, Meta, and Qualcomm Ventures.
