(Reuters) - Artificial intelligence startup Scale AI is seeking a valuation as high as $25 billion in a potential tender offer as it looks to capitalize on the booming demand for the technology, Business Insider reported on Friday, citing multiple sources.

Top tech companies are racing to build AI into their products and services. Startups catering to the surge in demand for AI chips and machine learning have been a bright spot in the private funding market.

Terms of California-based Scale AI's tender offer, where investors and/or the company buy shares from existing shareholders, are being discussed and the final valuation could change, the report said.

The startup, which was valued at nearly $14 billion in a funding round last year, did not immediately respond to Reuters' request for comment on the report.

Founded in 2016, Scale AI is backed by tech giants Nvidia ( NVDA ), Amazon ( AMZN ) and Meta.

The company provides vast amounts of accurately labeled data, which is pivotal for training sophisticated tools like OpenAI's ChatGPT.

The U.S. Department of Labor is investigating Scale AI for its compliance with the Fair Labor Standards Act.