{"slug": "nyc-ai-startup-backed-by-tech-billionaire-khosla-sues-rippling-over-trade-secret", "title": "NYC AI startup backed by tech billionaire Khosla sues Rippling over trade secret theft", "summary": "Runlayer, a New York-based AI security startup backed by billionaire Vinod Khosla, sued Rippling on Tuesday in the Southern District of New York, alleging the Silicon Valley software giant stole trade secrets to build a clone of its safety and governance product. The lawsuit claims Rippling violated confidentiality agreements during a nearly year-long partnership and secretly developed a competing AI product after refusing to pay a market rate for Runlayer's platform. Runlayer is seeking damages, attorney's fees, and an injunction to block Rippling from using its trade secrets.", "body_md": "# NYC AI startup backed by tech billionaire Khosla sues Rippling over trade secret theft\n\nSee more of our coverage in your search results.\n\n[Add The New York Post on Google](https://www.google.com/preferences/source?q=nypost.com)\n\nA New York-based AI startup is suing Rippling – [a Silicon Valley software giant](https://nypost.com/2025/04/03/business/ex-rippling-employee-spied-on-firm-for-rival-was-asked-to-be-like-james-bond/) that got a [$3 million tax break from Gov. Kathy Hochul](https://www.governor.ny.gov/news/governor-hochul-announces-rippling-expand-new-york-city-operations-creating-more-350-new-tech) – for allegedly stealing its trade secrets to “build essentially a clone” of its safety and governance product, The Post has learned.\n\nRunlayer – 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.\n\nTalks 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.\n\nRunlayer 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.”\n\n“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.”\n\nAccording 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.”\n\nRunlayer 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.\n\nRippling did not immediately respond to The Post’s request for comment.\n\nAnysource, 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.\n\nDespite substantial backing, the New York City startup – which at the time employed just five workers – allegedly jumped at the chance to partner with Rippling, a software company worth roughly $16 billion, the lawsuit said.\n\nRippling is based in San Francisco but also has New York offices. In December 2025, it was awarded $3.4 million in tax credits from Hochul to support its plans to expand its Manhattan presence, adding 371 new full-time jobs.\n\nDuring their nearly year-long partnership, Runlayer disclosed extensive trade secrets, including its source code and “Gateway deployment architecture,” subject to strict confidentiality agreements that prevented Rippling from using the information to “copy” or “create derivative works,” according to the suit.\n\nAfter negotiations to continue their relationship failed, Runlayer suspended services to Rippling on June 12 – alleging it learned later that day that the company was building a competing AI governance platform of its own, the suit said.\n\nThe lawsuit alleged Rippling is specifically preparing to launch a competing MCP Gateway, based on an unsolicited screenshot from a third party sent to Runlayer on July 1.\n\nA Gateway sits between AI models and their MCP servers, allowing AI agents access to plenty of tools and data while maintaing a secure governance layer.\n\nSince it suspended access to its pilot products, Runlayer alleged it has identified a series of Rippling job postings that align with some of the confidential information Runlayer had spent nearly a year disclosing, according to the suit.", "url": "https://wpnews.pro/news/nyc-ai-startup-backed-by-tech-billionaire-khosla-sues-rippling-over-trade-secret", "canonical_source": "https://nypost.com/2026/07/28/business/nyc-ai-startup-backed-by-tech-billionaire-khosla-sues-rippling-over-trade-secret-theft/", "published_at": "2026-07-28 16:31:46+00:00", "updated_at": "2026-07-28 16:58:09.253155+00:00", "lang": "en", "topics": ["ai-safety", "ai-startups", "ai-products", "ai-policy"], "entities": ["Runlayer", "Rippling", "Vinod Khosla", "Khosla Ventures", "Felicis", "Andrew Berman", "Parker Conrad", "New York Post"], "alternates": {"html": "https://wpnews.pro/news/nyc-ai-startup-backed-by-tech-billionaire-khosla-sues-rippling-over-trade-secret", "markdown": "https://wpnews.pro/news/nyc-ai-startup-backed-by-tech-billionaire-khosla-sues-rippling-over-trade-secret.md", "text": "https://wpnews.pro/news/nyc-ai-startup-backed-by-tech-billionaire-khosla-sues-rippling-over-trade-secret.txt", "jsonld": "https://wpnews.pro/news/nyc-ai-startup-backed-by-tech-billionaire-khosla-sues-rippling-over-trade-secret.jsonld"}}