SAN FRANCISCO, July 28 (Reuters) - Scale AI competitor

Micro1 is finalizing a Series A round valuing the startup at

$500 million, according to two sources familiar with the matter.

Micro1 provides data labeling services to artificial

intelligence labs, a sector that has grown tremendously in

recent years as high-quality, human-generated datasets have

become more important in training advanced AI systems. Micro1

has capitalized on this trend by building an AI-powered

recruitment engine enabling AI labs to target specialized

experts instead of large pools of low-wage labor.

The company has told investors it has crossed $50 million in

annualized revenue, up from $10 million earlier this year, and

is projecting it will cross $100 million in annualized revenue

by the end of September, the sources said. Former Twitter COO

Adam Bain joined its board recently, and venture capital firms

01A and LG Technology Ventures will invest in the round, the

sources said.

Micro1 has benefited from recent changes at San Francisco-based

Scale AI, a data labeling company that provides infrastructure

and services to help organizations accelerate the development of

AI models. Scale AI recently lost customers after Meta

Platforms ( META ) poached its CEO, Alexandr Wang, to become

Meta's chief AI officer, leading Meta's new Superintelligence

Labs. Among the customers that have left or are planning to

leave Scale AI are Alphabet's Google and OpenAI, which

are planning to move away over concerns that doing business with

Scale could expose their research priorities to Meta.

Another Scale AI competitor, Surge AI, is raising up to $1

billion, and raked in over $1 billion in revenue last year.