Scale AI has filed a lawsuit against former sales executive Eugene Ling and rival firm Mercor, alleging misappropriation of trade secrets and breach of contract. The suit claims Ling took more than 100 confidential documents detailing Scale’s customer strategies and proprietary data before joining Mercor, and that he attempted to pitch Mercor to one of Scale’s largest clients, identified in court filings only as Customer A.
Scale asserts the files could give Mercor access to contracts worth millions, while Mercor co-founder Surya Midha has denied using any Scale data, stating that the company is investigating the situation. The dispute underscores rising tensions as Mercor gains traction in large language model training, even as Meta’s $14.3 billion investment in Scale has left some enterprise customers exploring alternatives.
The case highlights intensifying competition among AI data preparation providers as enterprises seek high-quality, domain-specific training resources for next-generation models.
