Tech Brew Ride Home - Thu. 06/12 – Meta’s Big AI Acqui-hire

Episode Date: June 12, 2025

I explain how and why exactly this big Meta investment in Scale AI came about. Hollywood sues AI in a big way for the first time. A look at how stablecoins have mainstreamed crypto at long last. And episode number 205 of the long running series: we blew up traditional TV just to rebuild it. Links: Meta to Pay Nearly $15 Billion for Scale AI Stake and Startup’s 28-Year-Old CEO (The Information) Disney, NBCU sue Midjourney over copyright infringement (Axios) Wikipedia Pauses AI-Generated Summaries After Editor Backlash (404Media) How stablecoins are entering the financial mainstream (Financial Times) EXCLUSIVE: Amazon Doubles Prime Video Ads to 6 Minutes Per Hour (AdWeek) Learn more about your ad choices. Visit megaphone.fm/adchoices

On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. Welcome to the TechMean Bright Home for Thursday, June 12th, 2025. I'm Brian McCullough today. I explain how and why exactly this big meta investment in scale AI came about. Hollywood sues AI in a big way for the first time. A look at how stable coins have mainstreamed crypto at long last and episode number 205 of the long running series. We blew up traditional TV just to rebuild it. Here's what you miss today in the world of tech.

Gotta catch you up on something that sort of fell through the cracks because of when it happened. META has apparently formally agreed to take a 49% stake in scale AI for $14.8 billion and the deal that gives cash to scales shareholders and makes Alexander Wang a top meta executive. So sort of an acchia hire, right? Quote, Mata would put Wang in charge of a new superintelligence lab, along with other top-scale technical employees. The New York Times and Bloomberg reported Tuesday morning that will put Wang 28 in competition with some of his customers and friends including OpenAI CEO Sam Altman. The deal likely would further enrich Wang, who became the youngest self-made billionaire in the U.S. several years ago. The deal, which hasn't been finalized,

appears to be a rich one for Scales shareholders with big paydays for some of Scales biggest investors, such as a sell, index ventures, founders fund, and Green Oaks, as well as current and former employees. Scale shareholders also would maintain their existing holdings in scale, which would now be valued at $28 billion, including the cash invested up from $13.8 billion last year, end quote. But back to the AccuHire angle of this. The information also reports that this deal was motivated by Mark Zuckerberg's desire to find new leadership for meta's AI efforts and his personal relationship with Alexander Wang, quote, meta platform's CEO Mark Zuckerberg has tried to fix a seemingly existential problem in recent months. His company's large language model, Lama,

was falling behind competitors and struggling to perform as well. as models from Open AI, particularly on complex tasks. Increasingly, Zuckerberg turned to an unlikely person for advice. Alexander Wang, CEO of Scale AI, whose startup did the relatively low-grade work of hiring human experts to improve artificial intelligence models for an array of customers, including meta. Wang was essentially a business guy with technical chops, not the kind of elite researchers Zuckerberg recently had been lavishing with attention and offers of gigantic paydays.

And Scale AI's humble work sometimes made it a punching bag among Silicon Valley Insiders who didn't put it in the same class as cutting edge AI startups. But Wang 28 provided useful advice, and Zuckerberg began to reference direct feedback from Wang about potential solutions to meta's AI problems in meetings with other advisors. Zuckerberg felt Wang had good perspective from working with other research labs. That work means Wang knows what data those labs are interested in and how those labs might be trying to improve their own models. Now Wang's kinship with Zuckerberg has thrust Wang into a seat at the table of a

tech giant with one of the largest piles of money to devote to AI. The deal, which is expected to be announced as early as Thursday, may still have to pass scrutiny from regulators despite the fact that meta is taking a minority stake in scale. Some officials in Donald Trump's administration were upset by reports about the deal and have privately called it an issue of national security due to scales contracts with the Department of Defense, according to a person who spoke with them. The scale deal, which values the startup at about $28 billion, is the second largest investment meta has ever made in another company after its $22 billion purchase of WhatsApp. It comes since Meta's cash pile push past $70 billion, even as it spends heavily on new data centers. But Zuckerberg's decision to do the deal is

occurring despite complaints from leaders within Meta's generative AI group about Scale AI over the past year. Like other Scale AI customers, Meta relies on the company's experts who often have doctorates in fields like math and biology to annotate data and write ideal responses that it then uses to improve how AI models perform specific tasks. But Meta's AI leaders complained that the startup's data labeling contractors often return low-quality data. They were also upset about Meta's generative AI group exceeding its budget with scale, which led to the heads of some other teams at Meta to ask their staff not to spend money with scale. The complaints about Scale AI weren't enough to keep Meta's leaders from pursuing a deal, though.

In doing so, Zuckerberg mostly wanted to find new leadership for Meta's AI efforts, he told people even after overhauling the structure of its generative AI group in February and again in May. Zuckerberg had spent time with other prospects for jump-starting meta's AI efforts since last year. In recent months, he tried to recruit Korei Kavichkoglu, Google's chief AI scientist. He also reached out to Miramiradi, Open AI's former chief technology officer, who now runs her own AI startup. In the end, Zuckerberg came back to Wang. It helped that Wang got along well with Meta's chief product officer Chris Cox and other senior leaders at the company, despite the fact that Scale AI didn't work on the most sophisticated part of developing AI model, Zuckerberg saw him as having a deep understanding of where the industry was heading, and Wang had developed a reputation as a credible salesperson, building Scale AI's revenue to about $870 million last year.

Zuckerberg and other meta leaders aren't the only tech luminaries Wang has impressed. Wang has spent years developing mentor relationships with an older generation of tech leaders, including ex-Google CEO Eric Schmidt. He even shared an apartment with OpenAI CEO Sam Altman. He also became a lot. He also became a lot of tech leaders, including an older, including ex-ex Google CEO, Eric Schmidt. He even shared an apartment with OpenAI CEO, CEO Sam Altman. He also became. He also became, an occasional confidant of Stripe CEO Patrick Collison, who now sits on Meta's board of directors. In an interview last year, Collison said Wang, quote, has described to me on several occasions a somewhat non-consensus perspective on what's going to happen in some part of the industry, end quote. The piece is much longer, going in depth into the infighting and problems inside Meta's AI initiatives. Again, the word is that this deal will formally be announced today, perhaps, so consider this all a placeholder for that if it does indeed come to pass. Disney and NBC Universal are suing Mid Journey in California,

accusing it of direct and secondary copyright infringement. They say talks with Mid Journey failed to resolve their concerns, quoting Axios. It's the first legal action that major Hollywood studios have taken against a generative AI company. The complaint filed in a U.S. District Court in Central California accuses Mid Journey of both direct and secondary copyright infringement by using the studio's intellectual property to train their large language model and by displaying AI-generated images of their copyrighted characters. The filing shows dozens of visual examples that it claims show how Mid Journey's image generation tool produces replicas of their copyright

protected characters such as NBCU's minions characters and Disney characters from movies such as the Lion King and Aladdin. Disney and NBCU claim that they tried to talk to Mid Journey about the issue before taking legal action, but unlike other generative AI platforms that they say agreed to implement measures to stop the theft of their IP, Mid Journey did not take the issue seriously. Mid Journey, quote, continued to release new versions of its image service, which according to Mid Journey's founder and CEO, have even higher quality infringing images, the complaint reads. Mid Journey, quote, is focused on its own bottom line and ignored plaintiff's demands, it continues. It's notable that Disney and NBCU, which own two of the largest Hollywood IP libraries,

have teamed up to sue Mid Journey. The lawsuit suggests Hollywood Heavyweight will try to focus their copyright fight on platforms that create and distribute replicas of their copyrighted content, rather than the users of those platforms, and quote. The Wikimedia Foundation has paused an experiment that showed Wikipedia users AI-generated summaries at the top of some articles following an editor backlash, quoting 404 Media. Just because Google has rolled out its AI summaries doesn't mean we need to one-up them. I sincerely beg you not to test this on mobile or anywhere else, editor said in response to Wikimedia Foundation's announcement that it will launch a two-week

trial of the summaries on the mobile version of Wikipedia. This would do immediate and irreversible harm to our readers and to our reputation as a decently trustworthy and serious source. Wikipedia has in some ways become a byword for sober boringness, which is excellent. Let's not insult our readers' intelligence and join the stampede to roll out flashy AI summaries, which is what these are, although here the word machine generated is used instead, end quote. Two other editors simply commented, yuck. A page detailing the AI-generated summaries project called Simple Article Summaries explains that it was proposed after a discussion at Wikimedia's 2024 conference, Wikimania, where, quote, Wikimidians discussed ways that AI slash machine-generated remixing of the already created content can be used to make Wikipedia more accessible and easier to learn from. Editors who participated in the discussion thought that these summaries could improve the learning experience on Wikipedia,

where some article summaries can be quite dense and filled with technical jargon, but that AI features needed to be clearly labeled as such, and that users needed an easy way to flag issues with machine-generated remixed content once it was published or generated automatically. In one experiment where summaries were enabled for users who have the Wikipedia browser extension installed, the generated summary showed up at the top of the article which users had to click to expand to read. That summary was also flagged with a yellow unverified label. Wikimedia announced that it was going to run the generated summaries experiment on June 2nd

and was immediately met with dozens of replies from editors who said, Very Bad Idea, Strong as possible oppose, absolutely not, etc. A day later, Wikimedia announced that it would pause the launch of the experiment, but indicated that it's still interested in AI generated summaries, end quote. I cannot express enough how fascinating it is to see stable coins go mainstream in the world of finance. If you look at this through the original lens of Satoshi's stated desire for crypto to take over traditional finance and money, this is that coming true in a way. Example number whatever.

According to Visa, stable coin transaction volumes hit $752 billion in May up from $409 billion in May of last year, and wallets that regularly send and receive payments hit a record of 46 million. Quoting the FT. Investment Bank Standard Chartered has forecasted there could be some $2 trillion of stable coins in circulation by the end of 2008 from around $250 billion now. Others are even more bullish. Payments, giants, Stripe, and Visa are deepening their investments in the industry. Japan's Sony Bank is testing its own token for payments,

and there is speculation that banks and big Silicon Valley technology, companies will also join the fray. Uber, the ride-hailing app, is considering using them to make cross-border payments and reduce currency costs. Capturing the mood among investors, the market valuation of Circle, which runs the world's second largest stablecoin, nearly quadrupled in value in its first three days as a listed company in New York to $25 billion. But stablecoins exist in a gray area somewhere between a payments network, a bank deposit, and a security. Issuers have liabilities like a bank but don't make commercial loans. They are tradable and invest in assets like money market funds, but U.S. regulators have ruled that they are not securities if the coins can be fully redeemed on

demand and do not pass the investment income to holders. A stable coin is supposed to keep a fixed value against the asset to which it is pegged, but often deviates from it by more than a couple of a percent. Few see an immediate need for stable coins in countries with relatively advanced banking and payment systems where credit and debit cards can be used to help pay for daily expenses. Most of the traction is focused on cross-border payments where the system is most broken, says Michael Shalov, Chief Executive of Fireblocks, an infrastructure provider for digital assets. You're shortening settlement from three days to 10 seconds. It's going to go into every payment system, end quote. But large-scale use may take some time, even though issuers are subject to

anti-money laundering laws, stable coins remain the principal crypto asset for illicit transactions. a 2024 UN report named the Tethercoin as the preferred choice for Asian crime syndicates. Blockchain analysis company chain alias estimated that criminal activity associated with cryptocurrencies hit $51 billion last year with stable coins accounting for 63% of that, end quote. Finally today, I know my usual phrase is blowing up the cable bundle just to reconstitute it, but what this next segment presupposes is, what if we blew up the TV commercial just to resuscitate it? sources and documents reveal that Amazon Prime Video's ad load has increased to four to six minutes per hour,

up from two to three and a half minutes when ads were first introduced in January of 2024. That's still not as bad as the old must-see TV ad load, but still give them time. Quoting Ad Week. According to six ad buyers and documents reviewed by Adweek, the current ad load on Prime Video now ranges from four to six minutes per hour. And while that could bring down CPMs, cost per millo, that's how ads are sold. buyers will be watching whether this impacts user experience. The increase, which Amazon had telegraphed to investors, but has not publicly acknowledged to consumers, gives the company significantly more inventory to sell across its rapidly expanding streaming business. They told us the ad load

would be increasing, said Kendra Tang, programmatic supervisor at Rain the Growth Agency. That's been confirmed recently when we noticed more avails in the system, she said. The uptick in commercials is the latest sign of maturation from the streaming service, which in recent months has debuted a slew of new products designed to make it more appealing to marketers. Its show-level data, private auction deals, and forthcoming contextual offerings have all sought to separate Prime Video from its competitive set. When Prime Video launched its ad tier, Amazon made commercials the default for all Prime subscribers, prompting backlash from some consumers, but giving the company an immediate footprint of over 150 million monthly ad-supported

viewers. Still, to ease that transition, Amazon kept its ad-load light. They had to make the ad load palatable, said Doug Palladino of PMG. But by late 2024, Amazon had already told investors it would, quote, ramp up the volume in 2025. According to buyers, the shift reflects a broader effort to right-size Prime Video's inventory relative to the rest of the market. This is a lot of them coming back to equilibrium, Palladino said. They have more subscribers than any other ad-supported streamer, but they weren't watching enough for that to matter. More ad load helps bring that back into balance, end quote. At its new level, Prime Video's ad load begins to mirror broader industry standards. Netflix still offers the lightest ad experience while services like Hulu, Tobe, and Paramount

Plus carry heavier ad loads. Prime Video is now firmly in that middle tier, Paladino said, noting its ad volume now matches other premium platforms. Critically, streamers' ad load generally still pales in comparison to what viewers experience on linear television, which typically ranges from 13 to 16 minutes per hour. By increasing its ad load, Amazon and has created more inventory to sell. More inventory typically leads to lower CPMs, and while buyers haven't yet seen major drops, they expect them to come soon. Currently, buyers said that Amazon Prime video CPMs fall somewhere in the middle compared with other streamers. That's the upside here, said David Nirenberg, senior vice president of Digital at Intermedia Advertising. A biddable

environment plus greater supply should allow buyers to find impressions at more efficient rates. It's a good thing if they can scale without degrading user experience. If Prime Video drops 10 to 20% in price, it could move spend their way, Paladino said. We're in a tariff-heavy retail environment where clients need to do more with less. A cheaper premium platform helps. The increased inventory should also make it easier for ad buyers to target niche categories at scale, according to Nirenberg. That would help advertisers take further advantage of the granular data capabilities it offers

through its demand-side platform, end quote. Nothing more for you today. Talk to you tomorrow.