Tech news in 3 minutes
Runlayer, Rippling drop lawsuits — but the brouhaha is still a cautionary tale for founders
Runlayer and Rippling dropped their respective lawsuits against each other on Wednesday night, with no settlement, no money exchanged, and no legal fees paid, according to court documents. The core news: Rippling immediately released its MCP gateway—the product at the heart of the dueling lawsuits and a direct competitor to Runlayer’s offering—turning a legal fight into a market entry. This public dispute serves as a cautionary tale for founders in the AI era: when building software becomes trivial, your next competitor could be a prospective customer. Runlayer, an early-stage startup that emerged from stealth in November 2025, has raised $42 million from Khosla Ventures’ Keith Rabois and Felicis. Led by third-time founder Andrew Berman (Nanit, Vowel sold to Zapier), Runlayer’s MCP gateway securely handles enterprise AI agent requests for data from other software systems, adding role-based access control, observability, and security features. Rippling tested Runlayer’s gateway for over a year with close engineering collaboration but never became a customer. Instead, a Rippling employee texted Berman that his employer was building its own MCP gateway—described as a clone—and planned to release it as a product. Runlayer sued for breach of contract; Rippling countersued for patent infringement, which Runlayer viewed as a tactic to escalate legal costs. After three weeks of discovery, Runlayer dropped its suit, and Rippling dropped its countersuit without extracting a settlement. The takeaway: AI landscape shifts so rapidly that lengthy enterprise technical evaluations need rethinking. Rippling, historically focused on payroll and benefits, has now entered the AI gateway market, competing with Stripe, Ramp, Databricks, Docker, and Amazon Bedrock. Runlayer continues to pitch a broader bundle of agent security services, including agent creation and shadow AI detection.