The startup sued competitor Mercor Inc. in federal court Wednesday, accusing the startup and a former employee of misappropriating trade secrets to win new business.
A second lawsuit filed by an artificial intelligence company alleging a former employee stole trade secrets has been filed in California, just days after Elon Musk’s xAI alleged it had recently experienced corporate espionage.
In this case, Scale AI, a leading AI data-labeling firm, sued competitor Mercor Inc. in federal court Wednesday, accusing the startup and a former employee of misappropriating trade secrets to win new business.
Scale is valued at approximately $29 billion following a massive $15 billion Meta investment.
The lawsuit, filed in the U.S. District Court for the Northern District of California, targets Eugene Ling, Scale’s former head of engagement management, and his new employer, Mercor.
The case is Scale AI Inc. v. Mercor.io Corporation, 25-cv-07402.
In its court filing, Scale alleges Ling downloaded over 100 confidential documents, including proprietary customer strategy materials and product information, to a personal Google Drive while still employed at the company and after meeting with Mercor’s CEO.
According to the complaint, Ling then contacted one of Scale’s top clients, referred to as “Customer A,” on behalf of Mercor while still at Scale, even arranging calls to pitch Mercor’s services. The lawsuit claims this effort was an attempt to steal business worth “millions of dollars.”
Attempts to reach Ling’s attorney were unsuccessful. But on his social media, Ling posted that he “never used” any of the Scale files and is “still waiting for guidance on how to resolve this.”
“I just wanted to say that there truly was no nefarious intent here,” he wrote. “I’m really sorry to my new team at Mercor for having to deal with this.
