SAN FRANCISCO (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 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.