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Forbes Topline

Why Defense Contractor Scale AI Quietly Scrapped Deal With Chinese-Owned TikTok

Forbes Topline

Forbes

Business News, News, Entrepreneurship, Business

4.86 Ratings

🗓️ 11 February 2024

⏱️ 16 minutes

🧾️ Download transcript

Summary

The deal was one of several challenges facing the federal business of the $7.3 billion AI startup, whose CEO Alexandr Wang has become an outspoken advocate of American national security amid the threat of China. One expert called the optics “horrible.” Stay Connected Forbes newsletters: https://newsletters.editorial.forbes.com Forbes on Facebook: http://fb.com/forbes Forbes Video on Twitter: http://www.twitter.com/forbes Forbes Video on Instagram: http://instagram.com/forbes More From Forbes: http://forbes.com Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0

Hi everyone I'm David Jeans I'm a senior writer at Forbes on the tech team

0:06.8

cover AI National Security and Defense. I am joined in from San Francisco, Kenrick Kai, he's senior reporter on the

0:17.2

tech team as well and we're going to talk today about a story we published just

0:21.4

recently about major AI company called

0:25.1

Scale AI. They've raised, you know, they're valued more than 7 billion dollars and

0:30.4

they've been receiving a lot of hype and interest recently about some of the work they're doing.

0:37.0

But together we sort of took a look at what the company's been doing in the federal space and trying to work with the US government.

0:45.2

So I think it would be great to hear from you, Ken Rick, on how we first became interested

0:50.9

in scale and from the you know from

0:54.0

from from there we can you know sort of talk more about why

0:58.0

they decided to target you know

1:00.0

contracts and and generate revenue from the U.S. government.

1:05.0

Yeah, absolutely. Thanks David.

1:07.0

So, I've been keeping an eye on scale for a couple years now and we put the CEO Alexander Wang on our magazine cover last year

1:17.0

because scale has emerged in the last couple years as one of the most vocal and high profile startups building in the artificial

1:26.9

intelligence space. CEO Wang was at one point the youngest self-made billionaire as we picked him on our

1:35.6

billionaires list and the company has followed a couple different AI waves to

1:41.8

increasing revenue a couple years ago. and to allow those cars to drive autonomously.

1:54.0

And recently we're hearing that their revenue has continued to skyrocket from about $250 million

2:01.0

in annual recurring revenue last year to north of 700 million.

2:05.8

So this is a company that continues to position themselves as one of the key infrastructure suppliers for the AI ecosystem.

2:16.6

But in the course of reporting

...

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