Micro1, a startup founded three years ago that connects AI companies with human contractors for data annotation and model training, has secured $35 million in Series A funding, giving it a valuation of $500 million. 01 Advisors, the venture capital firm established by Twitter’s former CEO Dick Costolo and former COO Adam Bain, led the investment round.
Micro1 is among several businesses stepping in to fill the void in the data services sector that emerged following recent developments related to Scale AI. After Meta poured $14 billion into Scale AI and brought on its CEO, major AI labs like OpenAI and Google announced plans to end partnerships with Scale AI, likely due to fears that their research could be accessed by Meta. (Scale AI maintains that no confidential information is shared with Meta through their collaboration.)
Despite this, AI labs continue to require these data solutions, and companies like Micro1 are stepping in to meet the demand.
Ali Ansari, the 24-year-old CEO of Micro1, shared with TechCrunch that the company currently partners with prominent AI labs such as Microsoft and works with multiple Fortune 100 firms. According to Ansari, Micro1’s annual recurring revenue (ARR) has risen to $50 million, a major jump from $7 million at the start of 2025.
Although this figure is still much lower than that of larger rivals like Mercor, which brings in over $450 million in ARR, and Surge, which is said to have earned $1.2 billion in 2024, Micro1 continues to see robust adoption and growth among AI labs.
With this new investment, Adam Bain will join Micro1’s board of directors, alongside Joshua Browder, who is the founder and CEO of DoNotPay, an AI-powered legal assistant.
“Today, the primary way AI models learn is by leveraging new human-generated data. Micro1 plays a pivotal role in delivering this data to leading research labs, and is operating at an unprecedented pace,” Bain commented to TechCrunch.
Reuters previously disclosed information about Micro1’s fundraising activities.
Micro1, Surge, Mercor, and Scale AI all provide AI labs with access to a vast pool of human contractors who assist with data labeling and content creation for AI model training. This has become an essential resource for companies such as OpenAI, Anthropic, Meta, and Google as they work to advance their AI technologies.
Scale AI was the initial leader in this sector, realizing early on that it could hire low-cost contractors worldwide for data labeling tasks needed in AI training. However, Ansari points out that AI labs’ requirements have evolved, now seeking expert-level data annotation from professionals like experienced engineers, doctors, and writers to boost model accuracy. Sourcing such specialized talent has become the main challenge.
As a response, Micro1 created an AI-powered recruiter named Zara, which screens and interviews applicants hoping to become part of Micro1’s contractor network—referred to by Ansari as “experts.” The company reports that Zara has already onboarded thousands of experts, including faculty from Stanford and Harvard, and aims to add hundreds more each week.
The landscape for AI training data is shifting once again, with many AI labs now looking to partner with startups to develop virtual “environments”—simulated workspaces for training AI agents on various tasks. Ansari notes that Micro1 is developing new products in this area to address emerging needs.
Fortunately for firms like Micro1, AI labs typically collaborate with several data providers, since it’s nearly impossible for any single company to serve all their data requirements. For now, this means there are ample opportunities for multiple players in the market.
