San Francisco–based artificial intelligence firm Scale AI has filed a lawsuit against a former employee [name withheld in filings] and rival startup Mercor, accusing them of attempting to steal some of Scale’s biggest customers.
According to the complaint, Scale alleges that the ex-employee leveraged insider knowledge of client relationships and pricing strategies to help Mercor lure away contracts central to its enterprise business.
The suit claims the employee, who was hired by Mercor, “stole more than 100 confidential documents concerning Scale’s customer strategies and other proprietary information.”
Surya Midha, a co-founder of Mercor, acknowledges that Ling might have had access to some Scale data, but he disputes that his company used any of it.
“While Mercor has hired many people who departed Scale, we have no interest in any of Scale’s trade secrets and, in fact are intentionally running our business in a different way. Eugene informed us that he had old documents in a personal Google Drive, which we have never accessed and are now investigating,” Midha said in an emailed statement.
“We reached out to Scale six days ago, offering to have Eugene destroy the files or reach a different resolution, and we are now awaiting their response,” Midha said.
The lawsuit underscores how fierce competition has become in the fast-growing AI services market, where companies are racing to secure lucrative partnerships with Fortune 500 clients.
