Surge AI Set to Raise $1 Billion as It Surpasses Scale AI in Revenue

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San Francisco, July 2, 2025 — In a bold move that signals a major shift in the competitive landscape of artificial intelligence infrastructure, Surge AI, a leading data-labelling firm, is planning to raise up to $1 billion in funding — its first capital infusion since inception. The company aims to capitalize on growing demand for premium human-annotated data and mounting dissatisfaction with rival Scale AI, according to sources familiar with the matter.

Founded in 2020 by former Google and Meta engineer Edwin Chen, Surge AI has operated largely under the radar, bootstrapped and profitable. The company generated more than $1 billion in revenue last year, surpassing Scale AI’s $870 million during the same period — a remarkable feat for a relatively quiet player in the space. Surge is now reportedly targeting a valuation of over $15 billion in its debut fundraise.

Seizing the Opportunity Left by Scale AI

Surge AI's rapid rise comes at a time when Scale AI, once the undisputed leader in AI data infrastructure, is facing significant turbulence. In 2024, Meta made headlines by investing in Scale AI and acquiring a 49% stake, while appointing Scale CEO Alexandr Wang as its Chief AI Officer. The move triggered concern among Scale’s largest clients — including Google and OpenAI — who feared their strategic research data could be exposed to Meta’s internal operations.

This triggered a wave of customer departures from Scale, a shift that Surge has capitalized on swiftly. With clients actively looking for alternative partners to safeguard proprietary research, Surge’s reputation for security, precision, and ethical practices has emerged as a key differentiator.

Premium Labeling in the Age of RLHF

Unlike many of its competitors, Surge AI focuses on high-end, nuanced data labelling — especially crucial for modern techniques like Reinforcement Learning from Human Feedback (RLHF), which is instrumental in training large AI language models. Instead of outsourcing to low-wage mass annotators, Surge relies on a curated pool of skilled professionals to ensure quality and contextual understanding in annotations.

This high-precision approach has made Surge the preferred data partner for top AI labs like OpenAI, Anthropic, and Google.

A Vote of Confidence or a Risky Bet?

Surge AI’s planned $1 billion raise — a mix of primary and secondary capital to also offer liquidity for employees — is seen as a litmus test for investor confidence in the data-labelling sector. Some investors view data labelling as a core, long-term need for AI development, especially with AI models becoming more complex and reliant on human oversight. Others are skeptical, pointing to the industry’s thin profit margins and concerns that advancements in automation may reduce the need for human-labelled data.

Nevertheless, the fact that Surge AI has reached profitability without external funding and is now seeking capital for expansion rather than survival sets it apart in the Silicon Valley ecosystem — where massive venture rounds are often a prerequisite for scaling.

The Road Ahead

With the fundraising talks still in early stages, the final numbers may change. However, one thing is clear: Surge AI is no longer the quiet alternative. It is now a central player in the race to provide the data backbone of the AI revolution.

If successful, this raise will not only cement Surge AI’s position as a top-tier data infrastructure provider but also reshape the dynamics of the global AI supply chain — a space that is becoming increasingly strategic as big tech firms scramble to develop artificial general intelligence (AGI).