Top AI companies such as OpenAI and Google DeepMind ended their collaborations with Scale AI after Meta poured $14 billion into the data provider and brought its CEO on board. Despite this, AI labs continue to require data, presenting new opportunities for emerging startups to fill that need.
The main players and dynamics within the AI data sector are evolving. Recently, it appears Mercor—a platform focused on AI hiring that also delivers data solutions to AI companies—could be among the primary beneficiaries of these industry changes.
On today’s episode of Equity, Kirsten Korosec, Anthony Ha, and I (Max Zeff) take a closer look at the ongoing transformations in the AI data sector.
Mercor, established less than three years ago, is reportedly considering Series C investment offers that value the company at $10 billion, according to TechCrunch’s Marina Temkin earlier this week. Several proposals have been made, and Mercor claims to have turned down some, just seven months after securing a Series B round at a $2 billion valuation.
Mercor has informed investors it anticipates reaching $500 million in annual recurring revenue more quickly than Anysphere, the company that created Cursor and reached that milestone roughly a year after its main product launched.
Surge, a Scale AI competitor that surpasses Mercor in size, currently leads the AI data market. Surge reportedly hit $1 billion in revenue in 2024 without venture capital support and is now discussing fundraising at a $25 billion valuation.
Nonetheless, Mercor’s rapid expansion could pose a challenge to Surge, Scale AI, and any company seeking to provide data to AI labs.
Beyond the core data labeling services that made Scale AI prominent, Mercor also delivers tools to assist AI companies in building training environments for AI agents. These environments are quickly emerging as a new competitive frontier for AI data providers.
Tune in to the complete episode for discussions on:
- Bending Spoons’ $1.38 billion acquisition of Vimeo and its implications for the video sector.
- The rationale behind SpaceX's $17 billion commitment to the direct-to-cell industry, and how Apple factors into the equation.
- Klarna’s much-anticipated IPO, its initial performance, and an update on other recently listed firms like Figma and CoreWeave.
- Mercor’s latest fundraising developments and broader trends in the AI data field.
Equity returns next week. Make sure to subscribe on your favorite podcast platform!
