NYC AI startup backed by tech billionaire Khosla sues Rippling over trade secret theft

A New York-based AI startup is suing Rippling – a Silicon Valley software giant that got a $3 million tax break from Gov.Kathy Hochul – for allegedly stealing its trade secrets to “build essentially a clone” of its safety and governance product, The Post has learned.Runlayer – an AI security firm backed by tech billionaire Vinod Khosla – alleged Rippling violated its confidentiality agreements during a nearly year-long commercial partnership, according to a lawsuit filed Tuesday in the Southern District of New York.Talks to extend their partnership fell apart earlier this summer when Rippling refused to pay “a market rate” for Runlayer’s platform – while in the background, it was “secretly building” its own competing AI product using Runlayer’s confidential information, the lawsuit alleged.Runlayer alleged it was tipped off on June 12 when an insider at Rippling texted Runlayer CEO Andrew Berman: “There’s some things happening on the Rippling side that you should probably know about but I didn’t want to put them in Slack.”“There’s been a project internally to build essentially a clone o[f] Runlayer,” the insider wrote, according to the lawsuit.

“It’s not feature complete by any means but it’s almost a 1 to 1 copy of Runlayer.”According to the suit, the insider also suggested that Rippling CEO Parker Conrad was potentially behind the duplicate product, writing: “it smells like a Parker thing.”Runlayer is seeking a jury trial, along with damages, attorney’s fees and a preliminary injunction blocking Rippling from developing or selling a product designed with its trade secrets.Rippling did not immediately respond to The Post’s request for comment.Anysource, Inc., which does business as Runlayer and claims to help companies securely become AI natives, has raised $42 million from investors including Khosla Ventures and Felicis, a Californian venture capital firm, since it was founded just under a year ago.Despite s...