On Friday morning, Outlier AI, a subsidiary of Scale AI, sent an email to thousands of contractors informing them that their accounts had been deactivated. For many, this came as a complete shock, as they had been working on the platform for months or even years without any issues or negative feedback.
The surprise round of sweeping terminations has raised concerns about the future of the company, particularly given the timing of it following DeepSeek's surprise announcement, which also sent shock waves throughout America's technology industry.
DeepSeek, a one-year-old startup, revealed a stunning update last week: It presented an AI model called R1, which boasts similar capabilities to OpenAI’s o1 model, but operates at a fraction of the cost. The company said it had spent just $5.6 million on computing power for its base model, compared with the hundreds of millions or billions of dollars US companies spend on their AI technologies.
The Chinese company's innovation sparked a massive wave of rotation out of tech stocks on Monday morning, with Nvidia (NVDA) falling nearly 17% and losing $588.8 billion in market value. Meta, Alphabet, and other companies that represent Scale AI's largest clients have also seen their stock prices plummet, leaving newly unemployed contractors to wonder if their sudden terminations were related.
However, one contractor, who wished to remain anonymous, told GigFish that Outlier's issues may go deeper than just the DeepSeek announcement:
Due to the incompetent management of the projects, Outlier has a problem with production quality. That's why projects are constantly starting and stopping, constantly changing instructions etc. Outlier always spins it as if it is a problem of the taskers but actually the problem originates with the management, starting with the programmers, to QMs and Admins. These people just don't know what they are doing, can't produce logical instructions, onboarding, and screening, and constantly blame the taskers for that. I recently saw a familiar project with almost identical setup and instructions offered to another platform. It seems that some clients are starting to shop around because Outlier didn't deliver the expected quality.
Scale AI's CEO, Alexandr Wang, who recently accused DeepSeek of lying about the manner in which they achieved their innovation, stated that "the space is becoming more competitive, not less competitive", and it is becoming increasingly unclear what this means for the future of Outlier AI. For the company embroiled in class action lawsuits, accusations of wage theft, and now a massive wave of terminations stemming from allegedly unhappy clients, the future is looking increasingly uncertain.
