Micro1, a startup that helps AI companies find and manage human contractors for data labeling and training, has raised a $35 million Series A funding round that values the company at $500 million. The startup is one of many companies looking to fill the gap in the data market created by recent changes involving Scale AI. After Meta invested $14 billion in Scale AI and hired its CEO, AI labs, including OpenAI and Google, said they planned to cut ties with the startup, presumably over concerns that their research could end up in Meta’s hands. However, AI labs still need these data services, and startups like Micro1 aim to pick up the slack. Micro1 CEO Ali Ansari said Micro1 is now generating $50 million in annual recurring revenue (ARR), up from $7 million at the start of 2025. The demands of AI labs have shifted in recent years and companies now need high-quality data labeling from domain experts — such as senior software engineers, doctors, and professional writers — to improve their AI models. This led Micro1 to build its AI recruiter, Zara, which interviews and vets candidates who apply to work as one of the company’s contractors, or as Ansari calls them, experts. Micro1 says Zara has recruited thousands of experts — including professors from Stanford and Harvard — and that the company plans to add hundreds more every week. Ansari says Micro1 is building new offerings in the environments space to meet this demand.