Large AI labs like Openai and Google Deepmind cut connections with Scale AI after Meta invested $14 billion in data vendors and hired CEOs. However, AI Labs still need data. It leaves an opening for other startups that can provide.
The major players and factors in the AI data market are changing. Mercor, an AI employment platform that sells data services to AI Labs recently, may be one of the biggest benefactors of this shift.
Today, in Equity, Kirsten Korosec, Anthony HA, and I (Max Zeff) are digging deeper into the changes in the AI data market.
Co-founded less than three years ago, Melkor appears to be an interesting offer from Series C investors at a $10 billion valuation, TechCrunch’s Marina Temkin reported earlier this week. The offer has been rolled out, some say it fell just seven months after announcing the Series B investment at a $2 billion valuation.
Mercor told investors that getting a $500 million ARR on track with a faster ARR than the startup behind Cursor is on track.
Another competitor that scales AI larger than Melkor, Surge appears to be the current frontline of the AI data race. Surge reportedly exceeded $1 billion in revenue in 2024 without the support of the VC, but it is now in discussions with investors to raise it at a $25 billion valuation.
However, Melkor’s rapid growth could be threatening to expand surges, AI, and all startups are trying to sell their data to AI labs.
Beyond traditional data labeling services that put AI on maps, Mercor also offers products that help AI Labs generate training environments for AI agents. These environments are becoming the next battlefield for AI data startups.
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Equity is TechCrunch’s flagship podcast produced by Teresa Loconsolo, posted every Wednesday and Friday. Subscribe to us with Apple Podcasts, Cloudy, Spotify, and all casts. You can also follow X and thread equity, @EquityPod.
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