Scale AI, which helps tech companies prepare data to train their AI models, filed a lawsuit against one of its former sales employees and its rival Mercor on Wednesday. The suit claims the employee, who was hired by Mercor, “stole more than 100 confidential documents concerning Scale’s customer strategies and other proprietary information,” according to a copy seen by TechCrunch.
Scale is suing Mercor for misappropriation of trade secrets and is suing the former employee, Eugene Ling, for breach of contract. The suit also claims the employee was trying to pitch Mercor to one of Scale’s largest customers before he officially left his former job. The suit calls this company “Customer A.”
Mercor co-founder Surya Midha denies that his company used any data from Scale, although he admits that Ling may have been in possession of some.
“While Mercor has hired many people who departed Scale, we have no interest in any of Scale’s trade secrets and in fact are intentionally running our business in a different way. Eugene informed us that he had old documents in a personal Google Drive, which we have never accessed and are now investigating,” Midha told TechCrunch in an emailed statement.
“We reached out to Scale six days ago offering to have Eugene destroy the files or reach a different resolution, and we are now awaiting their response,” Midha said.
Scale alleges that these documents contained the specific data that would allow Mercor to serve Customer A, as well as several other of Scale’s most important clients.
Scale wanted Mercor to give it a full list of the files in the drive, and to prevent Ling from working with Customer A. It alleges in the suit that Mercor refused. Ling did not immediately respond to TechCrunch’s request for comment, but he later wrote on X: “Just heard I’m getting sued by Scale. Last month, I left Scale to work at Mercor. I know this was frustrating for my old team, and I feel bad about that.”
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Continued Ling, “When Scale reached out about some files I had in my personal drive, I asked if I could just delete them. But Scale asked that I not do anything with them, so I’m still waiting for guidance on how to resolve this. I’ve never used any of them in this role. It sounds like Scale wants to sue me and that’s up to them. But I just wanted to say that there truly was no nefarious intent here. I’m really sorry to my new team at Mercor for having to deal with this.”
There are scant clues in the suit about the identity of Customer A. The suit does say that if Scale’s rival did win this customer away, it would be a contract “worth millions of dollars to Mercor.”
Whatever the details of this suit, it does show one thing: Scale is clearly concerned enough about the threat of Mercor to pursue legal action. As TechCrunch previously reported, even with Meta’s multibillion-dollar investment into Scale, TBD Labs — the core unit within Meta tasked with building AI superintelligence — is still using Mercor and other LLM data training service providers.
Mercor is rising in the LLM training arena because it is known for hiring content specialists, often PhDs, to train LLM data in their areas of expertise.
In June, Scale announced 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.
Updated with comments on social media from Eugene Ling.
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![‘Backrooms’ Wants You Back and Is Adding More Rooms (Footage)
Backrooms, the surprise hit of the summer, wants you back in the room. And by room, we mean theater. Its distributor, A24, is reportedly gearing up to release a new version of the film with 15 extra minutes of footage starting on July 3. According to the AMC Theaters website, the Backrooms: Everything Must Go Edition “includes 15 minutes of new, theatrically exclusive post-credit bonus footage from [director] Kane Parsons.” What exactly is in that footage, we don’t know, and surely A24 is hoping you go to the theater to find out. We would be very, very surprised, though, if it expands too greatly on the mythology of the world or its creepy, ambiguous ending. That’s certainly the hope, but with a sequel almost certainly on the way, we’d imagine most secrets will be held until then. And yet, what about Backrooms has been traditional so far? We’re just speculating. It could very well be a whole new ending with twists and turns about what exactly the backrooms are, where they came from, and what their purpose is. The move comes as the summer season really heats up with the upcoming releases of Minions & Monsters, The Odyssey, and Spider-Man: Brand New Day over the next few weeks. Currently, Backrooms sits at about $185 million domestically but grossed only about $4 million this past weekend, good enough for sixth place.
Adding additional footage to get a few more repeat viewings is probably aimed at crossing the $200 million mark domestically, which would be an incredible feat. Not that grossing over $185 million in the U.S. and over $330 million worldwide isn’t already an incredible feat on its own.
Are you ready to head back to the theater to see more Backrooms? Is there anything that could be added that would be a disappointment? Let us know below. And to check if the Backrooms: Everything Must Go Edition is coming to your local theater, check its ticketing website. Want more io9 news? Check out when to expect the latest Marvel, Star Wars, and Star Trek releases, what’s next for the DC Universe on film and TV, and everything you need to know about the future of Doctor Who. #Backrooms #Adding #Rooms #FootageBackrooms,Kane Parsons ‘Backrooms’ Wants You Back and Is Adding More Rooms (Footage)
Backrooms, the surprise hit of the summer, wants you back in the room. And by room, we mean theater. Its distributor, A24, is reportedly gearing up to release a new version of the film with 15 extra minutes of footage starting on July 3. According to the AMC Theaters website, the Backrooms: Everything Must Go Edition “includes 15 minutes of new, theatrically exclusive post-credit bonus footage from [director] Kane Parsons.” What exactly is in that footage, we don’t know, and surely A24 is hoping you go to the theater to find out. We would be very, very surprised, though, if it expands too greatly on the mythology of the world or its creepy, ambiguous ending. That’s certainly the hope, but with a sequel almost certainly on the way, we’d imagine most secrets will be held until then. And yet, what about Backrooms has been traditional so far? We’re just speculating. It could very well be a whole new ending with twists and turns about what exactly the backrooms are, where they came from, and what their purpose is. The move comes as the summer season really heats up with the upcoming releases of Minions & Monsters, The Odyssey, and Spider-Man: Brand New Day over the next few weeks. Currently, Backrooms sits at about $185 million domestically but grossed only about $4 million this past weekend, good enough for sixth place.
Adding additional footage to get a few more repeat viewings is probably aimed at crossing the $200 million mark domestically, which would be an incredible feat. Not that grossing over $185 million in the U.S. and over $330 million worldwide isn’t already an incredible feat on its own.
Are you ready to head back to the theater to see more Backrooms? Is there anything that could be added that would be a disappointment? Let us know below. And to check if the Backrooms: Everything Must Go Edition is coming to your local theater, check its ticketing website. Want more io9 news? Check out when to expect the latest Marvel, Star Wars, and Star Trek releases, what’s next for the DC Universe on film and TV, and everything you need to know about the future of Doctor Who. #Backrooms #Adding #Rooms #FootageBackrooms,Kane Parsons](https://gizmodo.com/app/uploads/2026/06/Backrooms-furnature-pile-1280x853.jpg)
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