NYC AI startup backed by tech billionaire Khosla – Business News
A New York-based AI startup is suing Rippling – a Silicon Valley software program giant that bought a $3 million tax break from Gov. Kathy Hochul – for allegedly stealing its commerce secrets and techniques to “build essentially a clone” of its security and governance product, The Post has realized.
Runlayer – an AI security firm backed by tech billionaire Vinod Khosla – alleged Rippling violated its confidentiality agreements during a almost year-long industrial partnership, in line with a lawsuit filed Tuesday within the Southern District of New York.
Talks to increase their partnership fell aside earlier this summer time when Rippling refused to pay “a market rate” for Runlayer’s platform – whereas within the background, it was “secretly building” its own competing AI product utilizing Runlayer’s confidential info, the lawsuit alleged.
Runlayer’s management workforce together with (left to proper) Vitor Balocco, Tal Peretz and CEO Andrew Berman. Runlayer
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, in line with the lawsuit. “It’s not feature complete by any means but it’s almost a 1 to 1 copy of Runlayer.”
According to the go well with, the insider additionally steered that Rippling CEO Parker Conrad was doubtlessly behind the duplicate product, writing: “it smells like a Parker thing.”
Runlayer is in search of a jury trial, together with damages, lawyer’s charges and a preliminary injunction blocking Rippling from developing or promoting a product designed with its commerce secrets and techniques.
Rippling didn’t instantly reply to The Post’s request for remark.
Anysource, Inc., which does business as Runlayer and claims to help corporations securely develop into AI natives, has raised $42 million from traders together with Khosla Ventures and Felicis, a Californian enterprise capital firm, because it was based just below a 12 months in the past.
Despite substantial backing, the New York City startup – which on the time employed simply 5 staff – allegedly jumped on the likelihood to accomplice with Rippling, a software program company value roughly $16 billion, the lawsuit mentioned.
Tech billionaire Vinod Khosla has invested in Runlayer. Getty Images for TechCrunch
Rippling is predicated in San Francisco but in addition has New York workplaces. In December 2025, it was awarded $3.4 million in tax credit from Hochul to assist its plans to develop its Manhattan presence, including 371 new full-time jobs.
During their almost year-long partnership, Runlayer disclosed intensive commerce secrets and techniques, together with its source code and “Gateway deployment architecture,” subject to strict confidentiality agreements that prevented Rippling from utilizing the knowledge to “copy” or “create derivative works,” in line with the go well with.
After negotiations to proceed their relationship failed, Runlayer suspended providers to Rippling on June 12 – alleging it realized later that day that the company was building a competing AI governance platform of its own, the go well with mentioned.
The lawsuit alleged Rippling is particularly making ready to launch a competing MCP Gateway, primarily based on an unsolicited screenshot from a third occasion despatched to Runlayer on July 1.
Rippling is predicated in San Francisco but in addition has New York City workplaces.
A Gateway sits between AI fashions and their MCP servers, permitting AI brokers entry to loads of instruments and knowledge whereas maintaing a secure governance layer.
Since it suspended entry to its pilot merchandise, Runlayer alleged it has recognized a collection of Rippling job postings that align with some of the confidential info Runlayer had spent almost a 12 months disclosing, in line with the go well with.
