Scale AI, which helps tech firms put together information to coach their AI fashions, filed a lawsuit towards one in every of its former gross sales workers and its rival Mercor on Wednesday. The go well with claims the worker, who was employed by Mercor, “stole greater than 100 confidential paperwork regarding Scale’s buyer methods and different proprietary data,” in line with a replica seen by TechCrunch.

Scale is suing Mercor for misappropriation of commerce secrets and techniques and is suing the previous worker, Eugene Ling, for breach of contract. The go well with additionally claims the worker was attempting to pitch Mercor to one in every of Scale’s largest clients earlier than he formally left his former job. The go well with calls this firm “Buyer A.”

Mercor co-founder Surya Midha denies that his firm used any information from Scale, though he admits that Ling might have been in possession of some.

“Whereas Mercor has employed many individuals who departed Scale, now we have no real interest in any of Scale’s commerce secrets and techniques and actually are deliberately operating our enterprise differently. Eugene knowledgeable us that he had previous paperwork in a private Google Drive, which now we have by no means accessed and at the moment are investigating,” Midha informed TechCrunch in an emailed assertion. 

“We reached out to Scale six days in the past providing to have Eugene destroy the information or attain a distinct decision, and we at the moment are awaiting their response,” Midha mentioned.

Scale alleges that these paperwork contained the precise information that might permit Mercor to serve Buyer A, in addition to a number of different of Scale’s most vital shoppers.

Scale needed Mercor to offer it a full checklist of the information within the drive, and to stop Ling from working with Buyer A. It alleges within the go well with that Mercor refused. Ling didn’t instantly reply to TechCrunch’s request for remark.

There are scant clues within the go well with in regards to the id of Buyer A. The go well with does say that if Scale’s rival did win this buyer away, it might be a contract “price hundreds of thousands of {dollars} to Mercor.”

Regardless of the particulars of this go well with, it does present one factor: Scale is clearly involved sufficient about the specter of Mercor to pursue authorized motion. As TechCrunch previously reported, even with Meta’s multibillion-dollar funding into Scale, TBD Labs — the core unit inside Meta tasked with constructing AI superintelligence — remains to be utilizing Mercor and different LLM information coaching service suppliers.

Mercor is rising within the LLM coaching enviornment as a result of it’s recognized for hiring content material specialists, usually PhDs, to coach LLM information of their areas of experience.

In June, Scale introduced that Meta was investing $14.3 billion for a 49% stake in Scale and was hiring away its founder. Shortly after that, several of Scale AI’s largest data customers, who are competitors to Meta’s efforts, reportedly cut ties with it.