Scale AI has taken legal action against former executive Eugene Ling and emerging competitor Mercor, accusing them of attempting to steal its biggest clients and misusing confidential business information.
The lawsuit, filed in California, alleges that Ling downloaded more than 100 sensitive documents containing trade secrets, strategies, and client data before leaving Scale. According to the complaint, Ling then shared this material with Mercor to help the startup lure away Scale’s top customers.
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Scale is seeking damages, legal costs, and an injunction to prevent Mercor from using any of its proprietary information. The company argues that the breach not only violates Ling’s contractual obligations but also threatens its competitive edge in the high-stakes AI market.
Mercor’s co-founder, Surya Midha, has rejected the allegations, maintaining that the company did not benefit from any stolen information. He acknowledged, however, that Ling may have had access to confidential files while at Scale.
This lawsuit reflects the growing intensity of competition in the AI sector, where companies are fiercely guarding intellectual property and client relationships as demand for AI services accelerates.
