‘There was a year when he was only eating what he was killing. He made goat for me for dinner. He killed the goat. He killed it with a laser gun and then the knife. Then they send it to the butcher.’ — Jack Dorsey about Mark Zuckerberg
It is a real corporate financing puzzle. If you are a top AI researcher, you can start an AI company with a few of your top-AI-researcher friends, but you will need tons of money. So you go out to investors and say “I need $2 billion for electricity and stuff,” and they say “oh sure of course here you go” because you are a top AI researcher, and they give you $2 billion, and you spend $1.7 billion of it on electricity and another $300 million on paying yourself and your dozen researchers eight-figure salaries. And then a few weeks later, before you have even done any research, Meta comes to you and says “hey we need more researchers, we’ll pay you and your team nine-figure salaries, plus we already have nuclear power plants,” and you say “hmm that’s one more figure than we’re making now, we’re in.” And you all quit and your investors, who paid $2 billion, are now left with $1.7 billion of electricity that they have no particular use for.
That is a bad dynamic; the investors won’t give you the $2 billion if that’s what will happen. If they are going to give you money, they will want, not just an equity stake in your AI company, but an equity stake in you. If you decamp for a better job at Meta, they will want to get paid. […] Here’s the latest, from The Information:
Meta has agreed to take a 49% stake in data labeling firm Scale AI for $14.8 billion, two people familiar with the matter said. The unusual deal will be structured so Meta will send the cash to Scale’s existing shareholders and place the startup’s CEO, Alexandr Wang, in a top position inside Meta, the people said. […]
Meta, with abundant cashflow, could have bought Scale. But the company is coming off a painful trial in which regulators sought to show the company’s acquisitions of Instagram and WhatsApp were anticompetitive. The unusual structure of the deal, and the fact Meta will own just 49% of Scale, could be an effort to avoid more regulatory scrutiny.
quote { Facts About Mark Zuckerberg | NY mag }
