Surge AI to raise $1B at $15B valuation: Report
Last year, the data labelling startup reportedly generated more than $1 billion in revenue, outpacing rival Scale AI’s $870 million, while being profitable and entirely bootstrapped.
San Francisco-based data labelling startup Surge AI is gearing up for its first fundraise, with plans to secure $1 billion in a deal that could value the company at over $15 billion, reports Reuters.
The round is expected to include both primary and secondary components, offering liquidity to existing employees. According to the report, the deal is still in the early stages, and the valuation could go higher as discussions progress.
Founded in 2020 by Edwin Chen, a former Google and Meta engineer, Surge AI has quietly grown into a dominant player in the data labelling space, even surpassing its rival Scale AI in revenue.
Last year, the firm reportedly generated more than $1 billion in revenue, outpacing Scale AI’s $870 million for the same period, while being profitable and entirely bootstrapped.
Surge's planned fundraise comes at a time when Scale AI is dealing with a wave of customer departures. The company was previously valued at $14 billion in 2023 and recently hit a $29 billion valuation after Meta acquired a 49% stake and brought in Scale AI founder Alexandr Wang as its chief AI officer to lead its newly formed Superintelligence Labs.
Meanwhile, Surge AI has carved out a niche for itself with high-quality labelling services, attracting major clients such as OpenAI, Google, and Anthropic.
As demand soars for reinforcement learning from human feedback, a crucial method for training AI systems, the firm has built an edge by relying on a network of highly skilled/expert annotators instead of low-cost labour.
Edited by Swetha Kannan