Micro1, a Palo Alto-based AI data-labeling startup founded in 2022 by Ali Ansari, has reached a $500 million gross annual run rate, up from $100 million eight months ago, according to a person familiar with the company’s finances. The company began 2025 with about $7 million in annual recurring revenue and reached $100 million by December; internal projections indicate ARR could reach $200 million to $300 million in 2026. Micro1 retains roughly 60% to 70% of gross revenue, implying a net annual run rate of $150 million to $200 million. It supplies human-generated and increasingly synthetic data for large language models, robotics, agent evaluation, pre-training and business workflow optimization, with clients including Microsoft and multiple Fortune 100 companies. Growing contract sizes, reusable datasets and synthetic video descriptions are accelerating expansion, while competitors Mercor and Handshake have reached $2 billion and $1 billion in gross annualized revenue, respectively. Micro1’s founder says the company does not sell data to Chinese model makers.