Scale AI, a company that helps technology companies prepare data to train their AI models, sued one of its former sales employees and its competitor Mercor on Wednesday. The lawsuit alleges that the employee, who was hired by Mercor, “stole more than 100 confidential documents related to Scale’s client strategies and other business information.”
Scale AI, a company that helps technology companies prepare data to train their AI models, sued one of its former sales employees and its competitor Mercor on Wednesday. The lawsuit alleges that the employee, who was hired by Mercor, “stole more than 100 confidential documents related to Scale’s client strategies and other business information.”
Scale AI is suing Mercor for misappropriation of trade secrets and former employee Eugene Ling for breach of contract. The lawsuit also alleges that the employee tried to introduce Mercor to one of Scale’s largest clients before officially resigning from his previous job. The company is referred to in the lawsuit as “Client A,” TechCrunch reports .
Mercor co-founder Surya Midha denies that his company used any data from Scale, although he acknowledges that Ling may have had it.
“While Mercor has hired many people who left Scale, we have no interest in Scale’s trade secrets and are deliberately conducting our business differently. Eugene informed us that he had old documents on his personal Google Drive that we never had access to and are currently investigating,” Midha told TechCrunch. “Six days ago, we reached out to Scale with an offer that Eugene destroy these files or that we reach another settlement, and we are now awaiting their response.”
Scale wanted Mercor to provide it with a complete list of the files on the drive and to prohibit Ling from working with Client A. The lawsuit alleges that Mercor refused.
Ling later wrote on X: "Just heard Scale is suing me. I left Scale last month to work at Mercor. I know it was frustrating for my old team and I'm sorry. When Scale reached out about some files I had on my personal drive, I asked if I could just delete them. But Scale asked me not to do anything with them, so I'm still waiting for instructions on how to resolve this. I've never used any of them in this role. It seems Scale wants to sue me, and that's their right. But I just wanted to say that there was really no malice here. I'm very sorry to my new team at Mercor for having to deal with this."
The lawsuit does not name the company, but it says that if Scale's competitor wins this client, Mercor will receive a contract "worth millions of dollars."
Even with Meta's multi-billion dollar investment in Scale , TBD Labs — Meta's main division dedicated to building superintelligence — still uses Mercor and other providers of LLM data science training services.
Mercor is growing rapidly in the LLM education space as it is known for hiring content experts, often PhDs, to teach LLM data in their areas of expertise.
