Google moonshot spinout SandboxAQ claims an ex-exec is attempting ‘extortion’

A former SandboxAQ executive filed a wrongful termination lawsuit last month alleging so scandalous conduct against the company’s high-profile CEO, Jack Hidary, that the plaintiff himself redacted the most explicit details.

On Friday, the company’s attorneys filed a sharply worded response, describing the former employee as a “serial liar” and asserting that the lawsuit “asserts false claims for improper and extortionate purposes.”

Even the portions of the lawsuit that remain visible — which TechAmerica has reviewed — include striking allegations, assuming a court ultimately finds them to be valid. (A copy of the lawsuit has been made publicly available.)

The dispute offers a rare glimpse into how employee lawsuits can expose internal conflicts at otherwise opaque Silicon Valley companies, particularly in an industry where private arbitration clauses are standard in employment agreements.

The lawsuit was filed in mid-December by Robert Bender, who served as chief of staff to SandboxAQ CEO Jack Hidary from August 2024 through July 2025, according to the complaint. Bender alleges he was wrongfully terminated after raising concerns about several alleged incidents, including claims involving “sexual encounters” as well as what he describes as misleading financial information presented to investors.

SandboxAQ strongly denies the allegations. The company’s attorney, Orin Snyder — a prominent partner at the law firm Gibson Dunn — told TechCrunch: “This case is a complete fabrication. We look forward to debunking these baseless allegations and exposing the lawsuit — as detailed in our answer — for what it is — an opportunistic and extortionate abuse of the judicial process.”

The case has drawn attention in part because of SandboxAQ’s high-profile origins and backers. The company is an AI and quantum computing startup that emerged from a moonshot initiative at Alphabet, where Hidary previously led the effort. Hidary is also a longtime board member of the X Prize Foundation and a well-known figure in Silicon Valley.

SandboxAQ was spun off from Alphabet as an independent company in March 2022, with Hidary remaining as CEO. It soon attracted prominent investors, including former Google CEO Eric Schmidt, who also became chairman. Other investors include Salesforce CEO Marc Benioff, venture capitalist Jim Breyer, and Bridgewater Associates founder Ray Dalio.

In a separate court filing, Bender’s attorneys said the redacted sections of the complaint “describe sexual encounters and the physical condition of non-party individuals observed by Plaintiff during business travel.” In other words, the alleged incidents involve individuals who are not named as defendants in the lawsuit. Legal experts note that it is unusual for a plaintiff — rather than the defendant — to request such redactions.

There are multiple possible explanations for this approach, and TechCrunch was unable to determine Bender’s motivation. Generally, such tactics can range from protecting third parties not accused of wrongdoing to signalling that more damaging information could emerge during litigation if the case is not resolved.

The unredacted portions of the lawsuit provide broader outlines of the concealed claims. Bender alleges that Hidary used company resources and investor funds to “solicit, transport, and entertain female companions.” In one attached exhibit, a text message from Bender references prostitutes.

Bender also claims that Hidary sold tens of millions of dollars’ worth of personal stock at premium prices based on what Bender alleges were misleading financial figures shared with potential investors. According to the complaint, revenue figures presented to SandboxAQ’s board were allegedly 50% lower than those shown in investor presentations.

SandboxAQ’s legal team disputes all of these claims. “The Company did not make fraudulent disclosures to investors regarding its tender offer or otherwise. The CEO did not misuse corporate assets. Plaintiff invented these inflammatory allegations to manufacture statutory claims and to insulate himself from the consequences of his own misconduct,” the company’s lawyers wrote.

Bender, meanwhile, alleges that SandboxAQ has attempted to damage his reputation. His complaint states that he filed the lawsuit “only because his termination was followed by a malicious scorched earth campaign to destroy his reputation.”

While a jury will ultimately determine the truth of the allegations, several of Bender’s claims resemble findings from an investigative report published by The Information in July. That report cited sources who alleged that Hidary used company resources to fly women he was dating on corporate jets and that SandboxAQ’s revenue figures were significantly below projections.

Bender references The Information’s reporting in his lawsuit but denies being a source. SandboxAQ, however, asserts that he was a source and misrepresents his involvement. (The company’s complete response, which includes additional allegations against Bender, has also been made public.)

Despite the controversy, SandboxAQ continued to attract significant investment last year. In April, the company raised more than $450 million in a Series E round backed by Ray Dalio, Horizon Kinetics, BNP Paribas, Google, and Nvidia.

SandboxAQ also announced a $90 million secondary offering of shares. The company states it has raised a total of $1 billion and is valued at $5.75 billion, according to PitchBook estimates.