The dispute emerged from a relationship that initially positioned Rippling as a potential Runlayer customer. Runlayer, an early-stage AI security company led by founder Andrew Berman, came out of stealth in November 2025 and has raised $42 million from investors including Khosla Ventures’ Keith Rabois and Felicis.
According to Runlayer’s lawsuit, Rippling spent more than a year testing its MCP gateway while engineers from both companies worked together. Rippling ultimately did not become a customer. Berman later received a message from a Rippling employee saying the company was developing its own gateway and intended to turn it into a product. The employee characterized Rippling’s version as a clone of Runlayer’s technology.
Runlayer responded by suing Rippling, alleging that the company had breached contractual terms governing its product testing. Rippling later filed a countersuit alleging that Runlayer had infringed some of its patents.
The legal battle focused attention on technology used to control how AI agents interact with corporate systems. An MCP gateway can sit between an agent and the software containing information the agent needs, handling requests without giving the AI system unrestricted access to those applications. That intermediary can also enforce controls based on an employee’s role and maintain records of how AI systems are being used. A manager, for example, can receive different access privileges than an intern. The gateway can additionally provide logs and other visibility into agent activity.
Rippling’s newly released gateway links AI access with employee roles. The product moves the company further into AI security, where its offering now competes with products from Runlayer, Docker and Amazon Bedrock. The launch also follows Rippling’s expansion into another part of AI infrastructure. The company recently developed technology capable of routing requests among different AI models while tracking employee token spending through a dashboard. That offering competes with products from Stripe, Ramp and Databricks.
Runlayer is pursuing a broader agent-security offering around its own gateway. Its services cover areas including agent creation and identifying unauthorized AI agents operating inside companies without the knowledge of IT departments.
The dispute illustrates how quickly relationships between AI software vendors and prospective enterprise customers can change as companies build more of the technology themselves. In this case, more than a year of product testing preceded a legal battle between two companies that ultimately became direct competitors.
Neither lawsuit produced a settlement. Instead, both companies leave the dispute with competing MCP gateway products in the market, with Rippling expanding beyond its traditional payroll and benefits business and Runlayer continuing to build its agent-security platform.
This analysis is based on reporting from TechCrunch.
Image courtesy of Rippling.
This article was generated with AI assistance and reviewed for accuracy and quality.
