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Google has terminated its multimillion-dollar contract with Australian firm Appen, a provider of artificial intelligence training services employing over one million contractors globally. The contract, crucial for Appen’s operations, will end on March 19, 2024, as part of Google’s strategic review. Appen’s workforce, spread across 170 countries and speaking over 235 languages, focuses on labeling data to enhance AI systems for tech giants like Google. These workers, often referred to as “ghost workers,” contribute to the functionality of everyday AI tools, including voice recognition technologies.
The cancellation of this contract, which accounted for US$82.8 million (A$125 million) of Appen’s 2023 revenue, led to a 40% drop in the company’s share price. Google’s decision is part of a broader effort to optimize vendor operations across Alphabet, implying potential shifts to other suppliers for quality rating tasks. However, this move has raised concerns about the stability of employment for subcontractors in the tech sector, with the Alphabet Workers’ Union highlighting the precarious nature of such roles in AI development.
Appen, addressing the financial implications of the contract termination, is realigning its priorities and will provide further details in its full financial report on February 27. Amidst this shift, reports have surfaced about the low pay rates for Appen contractors, with some receiving as little as 2.2 US cents per task. Despite assurances of meeting minimum wage standards in various locations, the pay rates vary based on project complexity and required expertise. The company had previously faced scrutiny for asking contractors about their complexion, a question later removed from their application form, intended to gather data to improve AI systems.
