Facebook-parent Meta-backed artificial intelligence (AI) training company Scale AI is suing the Department of Defence. The company reportedly filed the lawsuit over what appears to be a contract dispute, with most court documents sealed and classified. The lawsuit was reportedly filed last month in the Court of Federal Claims.According to a Business Insider report, the nature of the dispute and what Scale is seeking remain unclear, as case documents are expected to include classified information at the “secret/no foreign” level. Another AI company, Enabled Intelligence, has joined as an intervenor defendant to protect its interests.Last year, Scale lost a bid for a contract worth up to $708 million from the National Geospatial-Intelligence Agency, part of the DoD, to Enabled Intelligence. The contract, which could last up to seven years, was the agency’s largest data-training agreement and includes work with the Pentagon’s AI effort, Maven.In December 2025, Scale filed a bid protest with the Government Accountability Office against the National Geospatial-Intelligence Agency. The protest was dismissed in January, two days before the company filed its lawsuit in the Court of Federal Claims. In 2024, Scale also won a $24 million, one-year contract from the National Geospatial-Intelligence Agency to work on data labelling for Maven.
What Scale AI said about the Department of Defence
In a statement to BI, a Scale spokesperson declined to comment on the DoD lawsuit, saying it “relates to a recent procurement decision.”“Scale AI stands firmly with Secretary Hegseth and the Department of War in their mission to get frontier AI capabilities into the hands of warfighters. We are committed to ensuring the procurement process reflects the high standards required for our nation’s most critical AI initiatives,” the spokesperson noted.Scale has signed several multimillion-dollar contracts with the DoD since 2020. In March, the startup announced it was working with defence tech startup Anduril and Microsoft to deploy AI agents in the US military under a DoD programme called “Thunderforge”. In August 2025, Scale announced a $99 million contract to develop AI tools for the US Army.The company is known for its data labelling service, which has helped tech giants like Google and Meta improve their AI chatbots. In exchange for a 49% share in the business, Meta invested $14.3 billion in Scale in June 2025.Scale’s former CEO, Alexandr Wang, wrote an open letter to US President Donald Trump after his second inauguration, outlining five ways the president could advance AI in his first 100 days. The then-Scale exec wrote that he wanted the US government to emulate tech giants by increasing spending on data and compute and noted Scale’s work with the DoD. Wang, who left Scale to join Meta’s Superintelligence Labs as chief AI officer, also attended the president’s AI dinner at the White House in September 2025.Since Meta’s investment, Scale has laid off 200 employees (14% of its workforce), lost clients including Google and xAI, and has been battling multiple new entrants trying to poach its clients and workers.
