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Meta to Face Trials for Allegedly Stealing Confidential Information from AI Startup

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A U.S District Judge ruled that Mark Zuckerberg’s Meta Platforms Inc will face a trial over accusations that it stole confidential information from artificial intelligence startup Neural Magic Inc. Meta is alleged to have taken Neural Magic’s “breakthrough” algorithms that enable AI systems to process information more quickly.

An expert also testified in court that Meta owes the Massachusetts-based AI startup as much as $766 million in royalties. Neural Magic’s investors include venture capital firms Andreessen Horowitz, VMware, Comcast, and Verizon.

The Lawsuit

The startup sued Meta in 2020 for allegedly stealing algorithms that enable simpler computers to run complex mathematical calculations more efficiently and allow research scientists to use larger data sets.

According to the lawsuit, Meta poached a Neural Magic computer scientist Aleksander Zlateski. The expert is alleged to have given the Facebook company the algorithms that make up the heart of Neural Magic’s technology. The AI startup accused Meta of publishing the algorithms on the open-source website GitHub and thanked Zlateski for solving a “key problem for Facebook’s continued advancement in the world of AI”.

In 2022, Meta urged the court to throw out the case. Mark Zuckerberg’s company argued that Neural Magic failed to identify any protectable trade secrets. It said Zlateski had not acquired the information improperly. But the court allowed the AI startup’s case to continue for all but one of the 41 secrets it accused Meta of misappropriating.

The judge rejected Neural Magic’s claims that they violated a non-competition clause or engaged in unfair business practices under Massachusetts law.


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