The leading data training platform Scale AI has sued former sales employee Eugene Ling and his new employer, the AI startup Mercor, on Wednesday, accusing both of allegedly stealing confidential information to illegally compete for Scale's core customers.

According to court documents disclosed by TechCrunch, Ling attempted to pitch Mercor's services to a key client of Scale (referred to as "Client A") before officially leaving the company. Scale claims that the employee privately transferred over 100 files related to customer strategies and trade secrets to his personal Google Drive, and the data is sufficient to help Mercor serve Client A and other key clients, potentially generating millions of dollars in revenue.

Scale also stated that prior to the lawsuit, it had requested Mercor to provide a list of documents and prevent Ling from contacting Client A, but these requests were rejected.

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Mercor denies using data, but admits Ling has old files

Surya Midha, co-founder of Mercor, responded in an email to TechCrunch, stating that while the company did hire several former Scale employees, including Ling, it denied using any trade secrets.

Midha said, "We are not interested in using any of Scale's data, and Mercor's business model is inherently different." He also revealed that the company had proactively contacted Scale six days ago, offering to have Ling delete the relevant files or reach another solution, and is currently awaiting a response.

Ling himself has not formally responded to media inquiries, but he posted on the social platform X, saying, "I just found out I was sued... When Scale asked me about the files on my private hard drive, I was willing to delete them, but they told me not to touch them, so I am still waiting for their guidance on how to handle it."

Ling emphasized that he never used Scale's services and had no intention of causing harm: "I'm really sorry that Mercor's new team got involved."

Customer Competition: Market Competition Intensifies Behind Legal Litigation

Currently, the identity of "Client A" remains undisclosed, but the court documents state that if Mercor successfully secures this client, the contract would be "worth millions of dollars."

This case reflects Scale's high level of concern about the threat posed by Mercor. Although Meta announced in June that it would acquire nearly half of Scale's shares for $1.43 billion and hired its founder, it is reported that several major clients, including competitors of Meta, have severed ties with Scale after the deal.