Micro1 Closes $35M Series A at $500M Valuation Challenging Scale AI

Micro1, a three-year-old startup specializing in AI data labeling and management of human contractors for AI training, has raised a $35 million Series A funding round led by O1 Advisors, valuing the company at $500 million. This funding positions Micro1 as a strong competitor to industry giant Scale AI, especially following Meta’s $14 billion investment in Scale AI and the subsequent concerns from major AI labs like OpenAI and Google about potential conflicts of interest. Micro1’s CEO Ali Ansari highlighted the company’s rapid growth to $50 million in annual recurring revenue, with clients including Microsoft and several Fortune 100 companies, though it still trails larger competitors such as Mercor and Surge. The startup emphasizes premium, expert-driven labeling over crowdsourced methods and integrates AI-assisted tools to enhance human labelers’ efficiency. Industry insiders note Micro1’s role in filling the market gap created by shifts in Scale AI’s client relationships, with new board appointees like Adam Bain and Joshua Browder signaling strong investor confidence. The broader AI data labeling market is expanding rapidly as demand for high-quality, unbiased training data surges across autonomous vehicles, natural language processing, and other AI domains.