Runlayer Sues Rippling Over 1-to-1 AI Gateway Clone After $42 Million Startup Shared Source Code
Updated
Updated · TechCrunch · Jul 28
Runlayer Sues Rippling Over 1-to-1 AI Gateway Clone After $42 Million Startup Shared Source Code
2 articles · Updated · TechCrunch · Jul 28
Summary
Runlayer sued Rippling, alleging the HR software company used a nearly yearlong product trial to copy its AI Model Context Protocol gateway and launch a competing product.
The complaint says Runlayer shared its roadmap and source code under an NDA and trial agreement that barred copying, then cut off talks after the sides failed to agree on price.
A Rippling insider later warned Runlayer of an internal effort to build “almost a 1 to 1 copy,” according to the suit, which claims trade secret misappropriation, unfair competition and breach of contract.
Rippling confirmed it is launching its own MCP gateway but denied misusing Runlayer’s IP, calling the lawsuit a fabricated attempt to avoid competition.
The case highlights a growing risk in enterprise AI infrastructure sales: deep technical trials can help startups win customers, but also give well-resourced buyers enough insight to build rival tools in-house.