Meta Pauses Work with Mercor Amid Confirmed Security Breach at $10 Billion Silicon Valley Startup
Meta Pauses Work with Data Contractor Mercor Following Security Breach
Meta, the tech giant led by Mark Zuckerberg, has reportedly paused all its work with data contracting startup Mercor following a major security breach. According to a report by WIRED, which cited people familiar with the matter, the pause is indefinite. This move comes as other major AI labs are reevaluating their work with the Silicon Valley startup, which is in the midst of investigating the incident.
The security breach was linked to a 'supply-chain' attack on the open-source tool LiteLLM, which is used by millions of developers to connect their apps with AI services. The attack was attributed to a hacking group called TeamPCP, known for engineer 'supply-chain' attacks that target software libraries widely used by developers when writing their own code. Separately, hacking group Lapsus$, notorious for extortion, also claimed responsibility for the breach and posted samples of what it claimed was stolen data.
The sample included material referencing data from Slack, a commonly used workplace communications app, as well as ticketing data, reported TechCrunch. Additionally, two videos purportedly showing conversations between the Silicon Valley startup's AI systems and contractors on its platform were included. While Mercor confirmed that it was "one of the thousands of companies" affected by the data breach, it did not provide many details.
A spokesperson for Mercor, Heidi Hagburg, told TechCrunch that the company had "moved promptly" to contain the situation, adding that a third-party forensics probe had been launched. Hagburg stated that "the privacy and security of our customers and contractors is foundational to everything we do at Mercor." However, she did not comment on whether the data of customers and contractors had been accessed and misused.
About Mercor
Mercor, founded in 2023, is regarded as one of Silicon Valley's hottest start-ups. The company works with AI companies, including OpenAI and Anthropic, to help train models by contracting specialists such as doctors, scientists, lawyers, etc. across various markets, including India. In October 2025, Mercor raised $350 million in a Series C funding round led by Felicis Ventures and was valued at $10 billion.
Comparison of Mercor's Funding Rounds
| Funding Round | Amount Raised | Valuation |
|---|---|---|
| Series C (October 2025) | $350 million | $10 billion |
| Not available | Not available | Not available |
Investor Takeaway
Investors should be cautious of potential security risks associated with data contracting startups.
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