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Scale AI, a data-labeling startup, is reducing its workforce by approximately 200 employees, representing about 14% of its staff, and terminating partnerships with 500 global collaborators. This was reported by Bloomberg on Wednesday. These actions come merely a month after Meta invested $14.3 billion in Scale AI and hired the startup's CEO.

According to Bloomberg, Scale AI's interim CEO, Jason Droge, informed employees that the company had expanded its core data-labeling business too rapidly. Within this sector, the startup provided AI laboratories with the labeled and structured data essential for training AI models.

Concurrently with the layoffs, Scale AI intends to recruit employees for its sales departments, focusing on enterprise and government clients.

It is probable that Scale AI, much like other AI startups acquired by larger corporations, will be compelled to diverge from its original core activities that brought it recognition. Following Meta's investment, several key data-centric clients of Scale AI have already ceased their collaboration with the startup.

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