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U.S. Labor Department Investigates Scale AI for Fair Labor Practices

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The U.S. Department of Labor is investigating Scale AI, a data labeling startup backed by major tech companies including Nvidia, Amazon, and Meta, for potential violations of the Fair Labor Standards Act. The investigation, which began nearly a year ago under the Biden administration, is focused on Scale AI’s compliance with fair pay practices and working conditions.

Scale AI, based in California, provides large volumes of accurately labeled data crucial for training AI tools such as OpenAI’s ChatGPT. The company also offers a platform for researchers to share AI-related information, with contributors from over 9,000 cities and towns.

A spokesperson for Scale AI emphasized that the company has worked closely with the Labor Department over the past year, explaining its business model and the emerging nature of the AI industry. The startup assured that feedback from its contributors has been largely positive, and it has dedicated teams to ensure fair compensation and support for workers. Nearly all payments to contributors are made on time, and the company resolves 90% of payment-related inquiries within three days.

Scale AI, which was founded in 2016, was valued at $14 billion in a recent funding round. Its client base includes AI firms like OpenAI and Cohere, as well as major corporations such as Microsoft and Morgan Stanley.

Singapore Charges Three Men in Connection with Fraud Against Dell and Super Micro

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Singaporean authorities have added additional charges against three men involved in a larger investigation into server fraud, which may involve AI chips. The charges are related to fraudulent activities committed against tech companies Dell and Super Micro. According to court documents, the men allegedly misrepresented the destinations of the servers they purchased, falsely claiming that the servers would not be transferred to unauthorized third parties.

The police charge sheets indicated that the defendants made false representations regarding the ultimate consignee of the items, suggesting that they would not be diverted. Investigations revealed that the servers may contain Nvidia chips, though authorities have not confirmed if these chips are subject to U.S. export controls.

This case is part of an ongoing investigation in Singapore, which involves 22 individuals and companies accused of making false representations. Additionally, the United States is investigating whether DeepSeek, a Chinese company behind a highly publicized AI model, has been using U.S. chips prohibited from being sold to China.

The investigation also covers Malaysia, where the servers allegedly ended up, and authorities there are exploring whether any local laws were violated. Singapore has so far charged two suspects, Aaron Woon, 41, and Alan Wei, 49, with conspiring to defraud Super Micro in 2024. Their charges have been amended to include fraud against Dell. A third suspect, Chinese national Li Ming, 51, was also charged with defrauding Super Micro in 2023.

Authorities seized 42 devices, including phones, computers, and laptops, which are being analyzed by forensic experts. The investigation is still in its early stages, with prosecutors seeking bank statements to trace the movement of funds and planning to work with international law enforcement.

French Antitrust Authority Investigating Microsoft Over Bing Access

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France’s antitrust authority has launched an investigation into Microsoft, scrutinizing allegations that the tech giant is diminishing the quality of search results for smaller competitors who pay to use Bing’s technology in their own search engines. According to a Microsoft spokesperson, the company is fully cooperating with the investigation led by the Autorité de la concurrence, France’s competition regulator.

While Microsoft does not hold a dominant share of the general search engine market, it is a key player in the search-engine syndication sector. The investigation, which could lead to formal charges and a potential fine, comes after concerns were raised about Microsoft’s practices potentially harming competition and impacting the user experience of smaller search engine providers.

The French competition authority has yet to comment on the specifics of the investigation.