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Good morning! It's Friday, January 26th. Today, we’re looking at Scale AI and its founder Alexandr Wang, the world’s youngest self-made billionaire!

THE FEATURE

The World's Youngest Self-Made Billionaire

In 2021, Scale AI raised $325M during a funding round that valued the company at $7.3B.

This news made waves in the AI industry, and it also made 24-year-old Alexandr Wang the world's youngest self-made billionaire! 

Scale AI's valuation is well earned—the company has been quietly powering the entire AI industry for years.

The Founder's Story

As to be expected of the world's youngest billionaire, Wang had a unique upbringing. 

His parents were top physicists who developed advanced weapons for the US military at the Los Alamos National Laboratory. It didn't take long for them to realize that their son was nothing short of a genius, reaching the national qualifiers for the US olympiads in computing, math, and physics. 

Wang was recruited by Addepar at just 17 years old. Addepar is a fintech firm led by Joe Lonsdale, a co-founder of legendary data analytics company Palantir.

After creating financial models for Addepar, Wang became a tech lead at Q&A site Quora— an insane position for someone without even a bachelor's degree. He stayed at Quora for two years while studying at MIT and somehow managed to pull off a perfect GPA.

At Quora, Wang met Lucy Guo, and the two co-founded Scale AI in 2016. Wang's parents thought this was just a summer project, but the young entrepreneur had already officially dropped out of MIT. 

Today, Scale AI is the keystone of the machine learning industry and generates $290M in annual recurring revenue!

The Business

At Addepar and Quora, Wang saw how each company spent countless hours combing through an endless feed of user data to create inputs for their machine-learning models. So, he created Scale AI as a solution for tech companies looking to outsource all their supervised machine learning work. 

Supervised machine learning involves gathering huge amounts of data, labeling it, and feeding it into the AI system. For instance, if you needed an AI tool to recognize what is and isn't an apple, you'd input millions of pictures labeled "apple."

Scale AI is arguably the most important company in the AI industry as it trains the machine learning models for companies like Meta, Microsoft, and, most notably, OpenAI. 

Conducting supervised machine learning for tech giants is Scale AI's biggest source of revenue, but it has other artificial intelligence offerings. 

Some of their most notable products include Scale Forge, which lets marketers generate visual advertising materials from written prompts, and Scale E-Commerce, which collects high-quality seller feed data for mid-sized retailers. 

How They Win: Securing US Military Contracts

On a trip to China in 2018 to visit a leading company in facial recognition technology, Wang had his eyes opened to the brewing "tech cold war" between China and the United States. 

Since then, he's been preaching the dangers of China's AI ambitions and pitching Scale AI as a critical American asset in the coming tech cold war. That pitch resonated in Washington and added the US Army, Air Force, and the Pentagon's Artificial Intelligence Office to Scale AI's client list. 

In 2022, Scale AI secured a $249M contract to provide its AI tech to the Department of Defense. One service they provide is Scale Donovan, a model that rapidly organizes real-time intelligence data to help commanders make fast decisions. 

Securing clients like Microsoft and OpenAI is impressive, but the US military, with its $857.9B in annual spending, will always be Scale AI's biggest catch. 

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