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2mo ago

US Labor Department Investigates Scale AI for Fair Labor Standards Compliance

The probe examines worker classification and pay practices at the $14 billion AI data labeling startup backed by Nvidia, Amazon, and Meta.

The Department of Labor headquarters is seen in Washington, D.C., U.S., May 13, 2021. REUTERS/Andrew Kelly/File Photo
Scale AI founder CEO Alexandr Wang
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Overview

  • The U.S. Department of Labor is investigating Scale AI for compliance with the Fair Labor Standards Act, focusing on worker classification and fair pay practices.
  • The investigation, initiated during the Biden administration in 2024, remains ongoing and has not yet determined any violations by the company.
  • Scale AI, valued at $14 billion, relies on a global network of contractors to provide labeled data essential for training AI tools like OpenAI's ChatGPT.
  • The company faces lawsuits from former workers alleging underpayment and misclassification as contractors, which Scale AI strongly disputes.
  • Scale AI recently secured a multimillion-dollar defense contract, raising questions about potential impacts from the ongoing investigation.