AI Daily: Meta said to pay Scale AI at least $450M per year for five years

Catch up on the top artificial intelligence news and commentary by Wall Street analysts on publicly traded companies in the space with this daily recap compiled by The Fly:

META, SCALE AI DEAL: As part of its deal to acquire a 49% stake in Scale AI, Meta (META) plans to pay Scale AI no less than $450M per year for five years for its AI products, or over half of its annual AI spend, whichever is lower, Forbes’ David Jeans reports, citing a person who worked on the deal. Such a commitment from the Facebook parent would make up a significant part of Scale’s revenue, the author notes.

MOVING TO THE SIDELINES: BofA downgraded CoreWeave (CRWV) to Neutral from Buy with a price target of $185, up from $76. Noting that the stock has run up 145% following Q1 results, the firm believes much of the near-term upside has been priced in. However, the firm raised its price target as it acknowledges there are positive developments including a new hyperscaler customer, an expansion of the company’s OpenAI agreement and a debt raise at lower cost of capital, BofA tells investors.

AI SEARCH DISRUPTING WEB TRAFFIC: About 20% of traffic to major websites still comes from search engines, with sites like Wikipedia and Tripadvisor (TRIP) relying even more heavily on them, but search traffic has been declining over the past year as users turn to AI tools like ChatGPT and Perplexity, Barron’s Adam Levine, Tae Kim, and Angela Palumbo report. Google’s (GOOGL) new AI-generated summaries at the top of search results may accelerate the shift away from traditional search links, with May possibly marking a key inflection point, according to the report. Ahead of the market open, Tripadvisor and Yelp (YELP) shares declined.

PARTNERSHIP: Snowflake, Snowflake (SNOW) and Acxiom, the connected data and technology foundation of Interpublic Group (IPG), announced a strategic initiative to build and deliver a modern, AI-powered marketing data infrastructure that will fundamentally transform how brands leverage AI for marketing. This collaboration will enable IPG to bring its proprietary data, identity, and collaboration tools directly into brands’ Snowflake environments.