Scale AI has lodged a lawsuit against one of its former employees, Eugene Ling, and fast-rising company Mercor, alleging theft of trade secrets and proprietary business information.
Although it is not uncommon for employees in the technology sector to leave, the artificial intelligence race has caused some companies to try to protect their business models and existing deals, and send a broader message about defecting.
According to his profile on LinkedIn, Mr Ling was employed at Scale AI from 2023 to 2025, and is currently listed as general manager at Mercor. The company describes itself as one that uses "AI to understand human ability and match talent with the opportunities they're best suited for".
Mr Ling also worked at Scale AI from 2019 to 2021.
"We won’t allow anyone to take unlawful shortcuts at the expense of our business," said Tom Channick, vice president of communications for Scale AI.
In the 28-page legal complaint filed by Scale AI, it said that Mercor recruited Mr Ling with hopes of expanding a relationship with a firm referred to as "Customer A".
"As a small and new competitor vying for a share of the market, Mercor sought to bypass the time and investment required to develop its own business strategies by illicitly acquiring those of Scale," the lawsuit reads.
"In the weeks leading up to his departure, Mr Ling stole more than 100 confidential documents concerning Scale’s customer strategies and other proprietary information."
Mercor has not yet responded to The National's requests for comment
Scale AI makes various tools that other technology companies use to increase the reliability of their AI offerings.
Its software assists with identifying items in photos, tagging subjects within large amounts of text, and labelling that information so it can be used in AI apps and chatbots.
The company lists Meta, Microsoft, OpenAI, the US Air Force and US Army as clients, among others.
Over the past five years, Scale AI's influence and media attention have grown significantly.
Yet the high-flying company has experienced turbulence in recent months.
The company's former chief executive and co-founder, Alexandr Wang, left to join Mark Zuckerberg and Meta's AI team after the social media giant announced a significant investment in Scale.
Shortly after, the company announced it would be trimming its workforce to adjust to changes in the AI sector.
Making matters more problematic, various media reports suggested that Meta was unimpressed with Scale AI's services, and despite Meta's major investment, the decision was made to begin to use some of the services of Scale AI's competitors.
The company has said its work in the AI space is "imperative" in the context of US national security.
“We’re at the brink of this incredibly powerful new technology, and the applications for national security are obvious," Mr Wang said during a discussion in May at the Centre for Strategic and International Studies in Washington.
"It’s going to be imperative for the US to stay ahead."
As of 2025, the Scale AI had 900 employees and a valuation of at least $13.8 billion.
