Engineering Manager

7 questions to ask any AI data vendor after a supply-chain security incident. The recent Mercor reporting has become a useful wake-up call for enterprise AI buyers. Mercor confirmed a security incident tied to a LiteLLM-related supply-chain attack, and reports said Meta paused work with the company while investigations continued. For security, procurement, and AI leaders, the lesson is simple: vendor review can no longer stop at the top layer. 1. Where does your data come from, and how is it governed? Ask for specifics on sourcing, consent, licensing, provenance, retention, and deletion. If the answer is vague, that is a warning sign. Shaip's public guidance around AI data collection emphasizes provenance, documentation, privacy safeguards, and structured collection practices. 2. What third-party and open-source tools are embedded in your workflow? A vendor may appear secure while relying on fragile middleware underneath. You need to know what sits between your data and the final workflow output. This matters more now because Mercor publicly linked its incident to LiteLLM and described itself as one of thousands of companies affected by a supply-chain attack. 3. How do you control access to sensitive datasets and evaluation assets? Access restriction, encryption, audit logging, and data segregation should be baseline requirements. 4. What does your quality assurance process actually look like? Look for measurable practices such as multi-tier review, gold datasets, adjudication, and structured correction loops. Shaip's public positioning around human-in-the-loop quality and LLM training data services supports the idea that quality should be engineered into the workflow, not added as a final check. 5. How do you handle edge cases and ambiguous judgments? In enterprise AI, not everything can be automated safely. Some tasks still require domain-sensitive human review. Shaip's public HITL guidance argues that humans should be placed at the highest-leverage points in the workflow, where judgment and accountability matter most. 6. What proof do you have for compliance and security maturity? Ask for evidence, not claims. Buyers should expect clarity on certifications, audits, and operating controls. Shaip publicly references ISO 27001:2022, HIPAA, and SOC 2 on its compliance page. 7. What happens if your ownership, partnerships, or strategic priorities change? This is where neutrality and customer protection matter. Buyers should ask how their data is ring-fenced, whether the vendor's incentives remain aligned with the customer, and how customer interests are protected over time. Shaip's public article on data neutrality argues that neutrality matters because customers need providers whose incentives are aligned with trust, not competing product agendas. Final takeaway. AI data vendors should not be treated like interchangeable service providers. They sit too close to model quality, IP protection, operational continuity, and enterprise trust. The right partner is not simply the one that can deliver fastest. It is the one that can show how data is governed, how workflows are secured, how quality is measured, and how customer interests remain protected. Shaip's public messaging across its site aligns strongly with that trust-first positioning.

After data breach, $10B-valued startup Mercor is having a month. After falling victim to a hacker, Mercor is facing lawsuits and reportedly losing big-name customers.

Meta pauses work with Mercor after data breach puts AI industry secrets at risk. Major AI labs are investigating a security incident that impacted Mercor, a leading data vendor. The incident could have exposed key data about how they train AI models. Meta has paused all its work with the data contracting firm Mercor while it investigates a major security breach that impacted the startup, two sources confirmed to WIRED. The pause is indefinite, the sources said. Other major AI labs are also reevaluating their work with Mercor as they assess the scope of the incident, according to people familiar with the matter. Mercor is one of a few firms that OpenAI, Anthropic, and other AI labs rely on to generate training data for their models. The company hires massive networks of human contractors to generate bespoke, proprietary datasets for these labs, which are typically kept highly secret as they're a core ingredient in the recipe to generate valuable AI models that power products like ChatGPT and Claude Code. AI labs are sensitive about this data because it can reveal to competitors - including other AI labs in the US and China - key details about the ways they train AI models. It's unclear at this time whether the data exposed in Mercor's breach would meaningfully help a competitor. While OpenAI has not stopped its current projects with Mercor, it is investigating the startup's security incident to see how its proprietary training data may have been exposed, a spokesperson for the company confirmed to WIRED. The spokesperson says that the incident in no way affects OpenAI user data, however. Anthropic did not immediately respond to WIRED's request for comment. Mercor confirmed the attack in an email to staff on March 31. "There was a recent security incident that affected our systems along with thousands of other organizations worldwide," the company wrote. A Mercor employee echoed these points in a message to contractors on Thursday, WIRED has learned. Contractors who were staffed on Meta projects cannot log hours until - and if - the project resumes, meaning they could functionally be out of work, a source familiar claims. The company is working to find additional projects for those impacted, according to internal conversations viewed by WIRED. Mercor contractors were not told exactly why their Meta projects were being paused. In a Slack channel related to the Chordus initiative - a Meta-specific project to teach AI models to use multiple internet sources to verify their responses to user queries - a project lead told staff that Mercor was "currently reassessing the project scope." An attacker known as TeamPCP appears to have recently compromised two versions of the AI API tool LiteLLM. The breach exposed companies and services that incorporate LiteLLM and installed the tainted updates. There could be thousands of victims, including other major AI companies, but the breach at Mercor illustrates the sensitivity of the compromised data. Mercor and its competitors - such as Surge, Handshake, Turing, Labelbox, and Scale AI - have developed a reputation for being incredibly secretive about the services they offer to major AI labs. It's rare to see the CEOs of these firms speaking publicly about the specific work they offer, and they internally use codenames to describe their projects. Adding to the confusion around the hack, a group going by the well-known name Lapsus$ claimed this week that it had breached Mercor. In a Telegram account and on a BreachForums clone, the actor offered to sell an array of alleged Mercor data, including a 200-plus GB database, nearly 1 TB of source code, and 3 TBs of video and other information. But researchers say that many cybercriminal groups now periodically take up the Lapsus$ name and that Mercor's confirmation of the LiteLLM connection means that the attacker is likely TeamPCP or an actor connected to the group. TeamPCP appears to have compromised the two LiteLLM updates as part of an even larger supply chain hacking spree in recent months that has been gaining momentum, catapulting TeamPCP to prominence. And while launching data extortion attacks and working with ransomware groups, such as the group known as Vect, TeamPCP has also strayed into political territory, spreading a data wiping worm known as "CanisterWorm" through vulnerable cloud instances with Farsi as their default language or clocks set to Iran's time zone. "TeamPCP is definitely financially motivated," says Allan Liska, an analyst for the security firm Recorded Future who specializes in ransomware. "There might be some geopolitical stuff as well, but it's hard to determine what's real and what's bluster, especially with a group this new." Looking at the dark-web posts of the alleged Mercor data, Liska adds, "There is absolutely nothing that connects this to the original Lapsus$."