Scale AI is suing a former employee and rival Mercor, alleging they tried to steal its biggest customers  

Scale AI, which helps tech corporations put together information to coach their AI fashions, filed a lawsuit in opposition to certainly one of its former gross sales staff and its rival Mercor on Wednesday. The go well with claims the worker, who was employed by Mercor, “stole greater than 100 confidential paperwork regarding Scale’s buyer methods and different proprietary data,” in keeping with a replica seen by Trendster.

Scale is suing Mercor for misappropriation of commerce secrets and techniques and is suing the previous worker, Eugene Ling, for breach of contract. The go well with additionally claims the worker was attempting to pitch Mercor to certainly one of Scale’s largest clients earlier than he formally left his former job. The go well with calls this firm “Buyer A.”

Mercor co-founder Surya Midha denies that his firm used any information from Scale, though he admits that Ling could have been in possession of some.

“Whereas Mercor has employed many individuals who departed Scale, now we have little interest in any of Scale’s commerce secrets and techniques and actually are deliberately operating our enterprise another way. Eugene knowledgeable us that he had previous paperwork in a private Google Drive, which now we have by no means accessed and at the moment are investigating,” Midha informed Trendster in an emailed assertion. 

“We reached out to Scale six days in the past providing to have Eugene destroy the recordsdata or attain a unique decision, and we at the moment are awaiting their response,” Midha stated.

Scale alleges that these paperwork contained the particular information that may enable Mercor to serve Buyer A, in addition to a number of different of Scale’s most necessary purchasers.

Scale needed Mercor to present it a full record of the recordsdata within the drive, and to forestall Ling from working with Buyer A. It alleges within the go well with that Mercor refused. Ling didn’t instantly reply to Trendster’s request for remark, however he later wrote on X: “Simply heard I’m getting sued by Scale. Final month, I left Scale to work at Mercor. I do know this was irritating for my previous workforce, and I really feel dangerous about that.”

Continued Ling, “When Scale reached out about some recordsdata I had in my private drive, I requested if I may simply delete them. However Scale requested that I not do something with them, so I’m nonetheless ready for steering on the way to resolve this. I’ve by no means used any of them on this position. It feels like Scale needs to sue me and that’s as much as them. However I simply needed to say that there actually was no nefarious intent right here. I’m actually sorry to my new workforce at Mercor for having to take care of this.”

There are scant clues within the go well with concerning the identification of Buyer A. The go well with does say that if Scale’s rival did win this buyer away, it might be a contract “value thousands and thousands of {dollars} to Mercor.”

Regardless of the particulars of this go well with, it does present one factor: Scale is clearly involved sufficient about the specter of Mercor to pursue authorized motion. As Trendster beforehand reported, even with Meta’s multibillion-dollar funding into Scale, TBD Labs — the core unit inside Meta tasked with constructing AI superintelligence — remains to be utilizing Mercor and different LLM information coaching service suppliers.

Mercor is rising within the LLM coaching area as a result of it’s identified for hiring content material specialists, typically PhDs, to coach LLM information of their areas of experience.

In June, Scale introduced that Meta was investing $14.3 billion for a 49% stake in Scale and was hiring away its founder. Shortly after that, a number of of Scale AI’s largest information clients, who’re rivals to Meta’s efforts, reportedly minimize ties with it.

Up to date with feedback on social media from Eugene Ling.