Mark Zuckerberg-led Meta 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. The report also added that other major AI labs too were reevaluating their work with the Silicon Valley startup, which is in the midst of investigating the incident.
The report comes days after Mercor, a data contractor for major AI firms such as OpenAI and Anthropic, confirmed that it had been targeted in a security breach.
Mercor confirms security breach
The 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 linked to a hacking group called TeamPCP, with a reputation for engineer these ‘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 even 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. Also included were two videos purportedly showing conversations between the Silicon Valley startup’s AI systems and contractors on its platform.
Although Mercor confirmed that it was “one of the thousands of companies” affected by the data breach, it did not provide many details.
Company spokesperson Heidi Hagburg told TechCrunch that the Mercor had “moved promptly” to contain the situation, adding that a third-party forensics probe had been launched.
“The privacy and security of our customers and contractors is foundational to everything we do at Mercor,” Hagburg said, adding, “We will continue to communicate with our customers and contractors directly as appropriate and devote the resources necessary to resolving the matter as soon as possible.”
However, Hagberg did not comment on whether the data of customers and contractors had been accessed and misused.
About Mercor
Founded in 2023 and regarded as one of Silicon Valley’s hottest start-ups, Mercor 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 in October 2025, and was valued at $10 billion.
