March 6 (Reuters) - The U.S. Department of Labor is

investigating Scale AI, a data labeling startup backed by tech

giants Nvidia ( NVDA ), Amazon ( AMZN ) and Meta, for

its compliance with the Fair Labor Standards Act, the

California-based firm said on Thursday.

The investigation is looking into Scale AI's compliance with

fair pay practices and working conditions and was initiated

nearly an year ago under the former President Joe Biden's

administration, the company said.

The startup said over the last year it has worked with the

department to explain its business model and the emerging

artificial intelligence industry.

Founded in 2016, Scale AI provides vast amounts of

accurately labeled data, which is pivotal for training

sophisticated tools like OpenAI's ChatGPT.

It also provides platform for researchers to exchange

AI-related information, with contributors in more than 9,000

cities and towns.

"The feedback we get from contributors is overwhelmingly

positive, and we have dedicated teams to ensure people are paid

fairly and feel supported," a spokesperson said.

Nearly all contributor payments are made on time and the

company resolves 90% of payment-related inquiries within three

days, the company said.

The startup was valued at $14 billion in a late-stage

funding round last year and counts AI firms OpenAI and Cohere,

as well as Microsoft Morgan Stanley among its

clients.

(Reporting by Kritika Lamba in Bengaluru; Editing by Arun

Koyyur)