Major Bay Area artificial intelligence company Scale AI — which recently received a $14.3 billion investment from Meta — claims in a lawsuit that a former employee jumped ship to a rival, stealing more than 100 confidential documents.
Eugene Ling, while still employed as a manager at San Francisco’s Scale, coordinated with its AI competitor Mercor.io to pilfer the proprietary material, the lawsuit filed Wednesday in San Francisco U.S. District Court against Ling and Mercor, also headquartered in San Francisco.
Ling, in an unusual move, took to social media platform X on Wednesday to address the legal action.
“Just heard I’m getting sued by Scale,” Ling wrote. “Last month, I left Scale to work at Mercor … When Scale reached out about some files I had in my personal drive, I asked if I could just delete them. But Scale asked that I not do anything with them, so I’m still waiting for guidance on how to resolve this.”
Ling wrote that he “never used” the files in his new job at Mercor. “There truly was no nefarious intent here,” Ling added.
Surya Midha, co-founder of Mercor, which runs an AI-powered recruitment and job-search platform, said Thursday that although his company has hired many people who have left Scale, “we have no interest in any of Scale’s trade secrets and in fact are intentionally running our business in a different way.”
Ling told Mercor “that he had old documents in a personal Google Drive, which we have never accessed and are now investigating,” Midha said. “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.”
Scale, which sells AI products and services for business and government use, claimed that Ling, around the time he began looking for a new job in June, “started downloading confidential documents relating to Scale’s business and customers.”
The documents “amount to a roadmap for unfairly competing with Scale on particular customer projects,” according to the lawsuit, which said Scale uncovered details of the alleged secrets theft through forensic analysis of Ling’s returned company laptop.
Scale is seeking unspecified damages and a court order barring Mercor and Ling from using or disclosing any of Scale’s trade secrets, and requiring Mercor and Ling to return allegedly stolen documents and information.
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Mercor, the lawsuit claimed, “sought to bypass the time and investment required to develop its own business strategies by illicitly acquiring those of Scale, the industry leader.”
Ling and Mercor allegedly also focused on one of Scale’s top customers — referred to as “Customer A” in the lawsuit — to help Mercor “reignite” its relationship with that customer.
“Mercor recruited Mr. Ling specifically to expand its relationship with this customer,” the lawsuit said. “While still employed at Scale, Mr. Ling met with Mercor’s CEO. The very next day, Mr. Ling dramatically increased his downloads of confidential Scale documents, particularly those for Customer A.”
Scale said in the lawsuit it believes Ling plans to use its allegedly stolen documents to illegally compete against Scale for customers, including Customer A and five others.
“Mr. Ling still has improper possession of Scale’s trade secrets to this day and continues to work on the Customer A account at Mercor for the benefit of Mercor,” the lawsuit claimed.
