Scale AI, which helps tech companies prepare data to train their AI models, filed a lawsuit against one of its former sales employees and its rival Mercor on Wednesday. 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,” according to a copy seen by TechCrunch.
Scale is suing Mercor for misappropriation of trade secrets and is suing the former employee, Eugene Ling, for breach of contract. The suit also claims the employee was trying to pitch Mercor to one of Scale’s largest customers before he officially left his former job. The suit calls this company “Customer A.”
Mercor co-founder Surya Midha denies that his company used any data from Scale, although he admits that Ling may have been in possession of some.
“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 told TechCrunch 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.
Scale alleges that these documents contained the specific data that would allow Mercor to serve Customer A, as well as several other of Scale’s most important clients.
Scale wanted Mercor to give it a full list of the files in the drive, and to prevent Ling from working with Customer A. It alleges in the suit that Mercor refused. Ling did not immediatel …