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A second lawsuit submitted by an artificial intelligence society in which a former employee stole business secrets was submitted in California, only days after Elon Musks Xai claimed that it had recently experienced Corporate espionage.
In this case, scale AI, a leading AI data marking company, sued the competitor Mercor Inc. on Wednesday before the Federal Court, who accused the startup and a former employee of the abuse of business secrets for winning new business.
The scale has a value of around 29 billion US dollars after a massive meta investment of 15 billion US dollars.
The allegations
The lawsuitSubmitted to the US district court for the northern district of California, aims at Eugene Ling, the former head of Scale’s engagement management, and his new employer Mercor.
The case is Skala AI Inc. against Mercor.io Corporation, 25-cv-07402.
In his court registration, scale claims Ling has downloaded Over 100 confidential documents, including proprietary customer strategy materials and product information, on a personal Google drive while they are still employed in the company and after meeting Mercors CEO.
According to the complaint, Ling then contacted one of the top customers of Scale, which was referred to as “Customer A”, in the name of Mercor, while he was still displayed in the scale, and even made calls to take up Mercor’s services. The lawsuit claims that these efforts were an attempt to steal the business worth “millions of dollars”.
Attempts to reach Lings lawyer were unsuccessful. But in his social media, Ling posted That he did not use any of the scaling files and “still waiting for how it can be resolved.”
“I just wanted to say that there was really no shameful intentions here,” he wrote. “I’m really sorry for my new team at Mercor that I have to deal with it.”
Mercor’s answer
Co -founder of Mercor Surya Midha contested any abuse The intellectual property of Scale from Scale, with the two employees joined in Mercor, but the two companies work under “deliberately different” strategies. He added that Mercor had examined the matter and offered that Ling deleted all documents in his possession.
“While Mercor has hired many people who left the scale said in an explanation.
“Eugene informed us that he had old documents in a personal Google drive that we have never accessed and that we are now investigating,” it says. “We contacted the scaling six days ago to destroy Eugene the files or reach another solution, and we are now waiting for their reaction.”
The scaling in turn argues that the order of Ling to destroy the files would eliminate decisive evidence. The company tries for compensation, legal costs, an injunction, which Mercor describes by using the stolen material and the return of all abused documents.
The legal move of scale is another speed for a turbulent period for the company, which recently experienced the massive investments of META, the hiring of the CEO of Skal, Alexandr Wang, through meta and a reduction of 14%.
Cutthroat competition comes to the dishes
The case is an insight into the extremely competitive character of the AI sector, in which intellectual property – in particular data strategy and customer relationships – is the key to market dominance. The situation reflects another latest action for business secretWhen Elon Musks Xai sued a former engineer because he supposedly stolen confidential information on his way to a rival.
In this case, Musk’s company claims that Zhihao “Zack” Li Li -Companies stole confidential files that were bound by the development of Grok, the company’s chatbot before being pushed to Rival Openai.
The complaint submitted to the California State Court, who came to Xai as an engineer last year, accused himself after he has agreed to take on a job at Openaai. According to court applications, Li also sold a limited XAI share worth 7 million US dollars before his departure.
According to the lawsuit, Li admitted during an internal meeting on August 14 that he had accepted sensitive documents, although Xai claimed that he had tried to “cover” his traces by deleting files. Forensic checks later discovered additional materials that were still kept on its devices, the company claims.
Musks Startup argues that the stolen information could enable Openai to improve chatt with the “more innovative AI and imaginative features of Xai”.
This case is Xai Corp against Xuechen Li, US district court of the US district, Northern District of California, No. 3: 25-CV-07292-RFL
What are the broader effects?
For investors and the AI industry in general, the lawsuit illuminates two important risks.
First, the theft of highly complex and coveted intellectual property or even the appearance of the competitive position in a market can quickly change in a market where trust and proprietary data are currency. Second, it signals that KI startups can increasingly turn legal options to enforce borders and protect their lawn.
Since AI becomes part of the technology that we constantly see and use, the companies they manufacture become even more violent for their products and brands. The value of proprietary data and customer relationships protects the legal protection, and the precedence cases that are determined by complaints, like this, protect the next border for companies that want to protect their tools and reputations.
“The scale has become the industry leader in the strength of our ideas, innovation and execution,” said Joe Osborne, spokesman for scale. “We will not allow anyone to take illegal abbreviations at the expense of our business.”
