The deal was one of several challenges facing the federal business of the $7.3 billion AI startup, whose CEO Alexandr Wang has become an outspoken advocate of American national security amid the threat of China. One expert called the optics “horrible.”n the fall of 2022, Scale AI CEO Alexandr Wang saw a huge opportunity: a deal with TikTok where his $7.3 billion AI data-labeling company would provide insights for the social media giant’s advertisers.
"Strategically, both from a perception issue and security perspective, bad decision,” Bill Evanina, former director of the U.S. government’s National Counterintelligence and Security Center, told, speaking generally about any deal between a defense contractor and TikTok."But at the end of the day, when you partner with ByteDance, you might make 10X the money you're making in the Department of Defense.
was in part inspired by a 2018 trip to China, during which he toured the offices of TikTok’s parent ByteDance and other tech firms. He left impressed by the AI they were developing, but worried it could pose a threat to American leadership: “You could tell it was for no good,” he said, “and it was really scary.”
After the release was published, Colonel Joe O’Callaghan told Scale executives the company had overstated the nature of the partnership, multiple sources in position to know told. They said Scale did not have access to the XVIII Airborne Division’s air tasking orders at the time and that Donovan had not been greenlit for “critical use cases.” Brennan said Scale stands by the press release and that he could not comment on contractual agreements.