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Unglamorous World of Data Infrastructure Drives Surge in AI-Focused Tech M&A

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Despite a slowdown in global dealmaking due to tariffs and geopolitical uncertainty, the data infrastructure sector is booming as legacy tech giants scramble to secure their positions in the AI race. Companies that handle the vast volumes of data required to train advanced AI models have become key acquisition targets for firms like Meta, Salesforce, and ServiceNow, eager to compete with leaders such as OpenAI, Google, and Anthropic.

“AI without data is like life without oxygen, it doesn’t exist,” said Brian Marshall, global co-head of software investment banking at Citi, highlighting how data management has taken center stage in the tech industry’s current moment.

Technology deals have been one of the few bright spots in a subdued M&A market, accounting for $421 billion out of the $1.67 trillion in global deals announced in the first five months of 2025—roughly 25% of total M&A volume. This marks a steady rise from 20% in 2024 and 17% in 2023. Notably, nearly 75% of the value of tech deals involves AI software makers.

Goldman Sachs Managing Director Matthew Lucas described enterprise data as the “most dynamic area in software M&A right now,” emphasizing that speed and being first to market are critical, driving companies to acquire rather than build their own capabilities.

Investment bankers identify companies like Confluent, Collibra, Sigma Computing, Matillion, Dataiku, Fivetran, Boomi, and Qlik as likely acquisition targets. These firms specialize in integrating, analyzing, and managing data on cloud platforms—capabilities essential for effective AI deployment.

Executives from Boomi, Dataiku, Fivetran, and Qlik expressed no surprise at the increased attention. Dataiku CEO Florian Douetteau noted that “messy, siloed data” has long limited analytics potential, but the urgency of AI has made resolving these issues existential for businesses.

Recent multibillion-dollar acquisitions illustrate this trend. Meta’s $14.8 billion deal for a 49% stake in data-labeling company Scale AI, Salesforce’s $8 billion plan to buy data integration firm Informatica, and ServiceNow’s acquisition of data catalog platform Data.world exemplify how legacy tech companies are investing heavily to own the data pipeline critical for AI.

Globally, generative AI spending is forecast to hit $644 billion in 2025, a 76.4% increase from 2024, underscoring the scale and pace of AI investment.

IBM also recently closed its acquisition of data management company DataStax, aiming to improve handling of unstructured data for its AI platform.

However, dealmakers caution that acquiring data infrastructure alone does not guarantee AI success. Proper organization and filtering of data are essential to avoid errors, as seen when Air Canada faced legal issues over bad AI chatbot advice due to poor data input.

“A lot of companies have a huge amount of data, but they’re learning that you can’t just funnel every piece of data you have into an AI engine without organization and expect correct results,” said Brian Mangino, partner at Latham & Watkins.

The rapid pace of acquisitions and the high stakes in AI competition highlight how data infrastructure—though less glamorous than AI algorithms themselves—is becoming the backbone of future tech innovation.

Meta Poaches 28-Year-Old Scale AI CEO in $14.3 Billion Stake Deal

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Meta, the parent company of Facebook, has taken a 49% stake in the data-labeling startup Scale AI for $14.3 billion, valuing the company at $29 billion. As part of the deal, Scale’s 28-year-old CEO Alexandr Wang will join Meta to lead its new superintelligence efforts, marking a major move in Meta’s artificial intelligence strategy.

Meta confirmed plans to deepen collaboration on data production for AI models, but did not disclose financial details publicly. Sources close to the discussions said the primary motivation behind the multibillion-dollar investment was securing Wang’s leadership for Meta’s superintelligence unit.

Wang, a Los Alamos, New Mexico native born to Chinese immigrant physicists, dropped out of MIT to co-found Scale AI. He quickly gained acclaim as one of Silicon Valley’s most promising entrepreneurs, achieving billionaire status in his twenties. His influence extends into Washington D.C., where he has testified before Congress and helped secure government contracts for Scale.

Meta’s AI efforts have faced challenges recently, including staff departures and delays in launching open-source AI models that could compete with Google, OpenAI, and China’s DeepSeek. By recruiting Wang—a business-focused leader rather than a research scientist—Meta CEO Mark Zuckerberg is betting on a new approach to revitalize its AI ambitions.

Scale’s chief strategy officer, Jason Droege, will serve as interim CEO following Wang’s transition. Despite the large investment, Meta does not plan to take a board seat at Scale. A select group of Scale employees will also join Wang at Meta, while Wang will retain his seat on Scale’s board.

The $14.3 billion investment ranks as Meta’s second-largest acquisition after its $19 billion WhatsApp buyout. It remains uncertain whether the deal will face regulatory review amid ongoing antitrust scrutiny faced by Meta, which has been sued by the U.S. Federal Trade Commission for allegedly stifling competition via acquisitions like Instagram and WhatsApp.

Founded in 2016, Scale AI plays a pivotal role in providing accurately labeled data essential for training advanced AI models such as OpenAI’s ChatGPT. The company uses platforms like Remotasks and Outlier to manage gig workers who manually label data. Scale was valued at nearly $14 billion in a May 2024 funding round backed by Nvidia, Amazon, and Meta.

While the deal represents a windfall for early investors like Accel and Index Ventures—who can now sell half their stake—it may raise concerns among Scale’s AI lab clients, who might fear Meta gaining insight into competitors’ data priorities through Wang’s ongoing board membership.

OpenAI to Continue Collaboration with Scale AI Despite Meta’s Major Stake Purchase

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OpenAI confirmed it will maintain its partnership with Scale AI after Meta agreed to acquire a 49% stake in the AI data-labeling startup for $14.8 billion, OpenAI CFO Sarah Friar said at the VivaTech conference in Paris.

Scale AI is vital for providing the vast volumes of labeled training data essential for advanced AI tools like OpenAI’s ChatGPT. Despite Meta’s significant investment, OpenAI emphasized it intends to keep working with multiple data vendors rather than exclusively relying on Scale.

Friar highlighted the importance of keeping the AI ecosystem open, cautioning against moves that could slow innovation by locking out competitors. “We don’t want to ice the ecosystem because acquisitions are going to happen,” she said.

Meta’s stake comes as OpenAI’s ChatGPT competes directly with Meta’s Llama AI models. Scale AI’s CEO Alexandr Wang will now lead Meta’s new superintelligence unit, underscoring the startup’s growing influence in the AI space.

Friar also noted the increasing complexity of AI models requires input from a diverse network of human trainers with deep expertise—from academics to scientists—reflecting the growing sophistication in AI development.