Runlayer and Rippling Drop Lawsuits Over Competing AI Gateway Technology

Runlayer and Rippling have dropped their lawsuits against each other, ending a short-lived legal fight over competing enterprise AI gateway technology. Court documents show there was no settlement payment, and each company is responsible for its own legal costs.

Rippling moved quickly after the cases were dropped, releasing the MCP gateway at the centre of the dispute as part of its broader AI Governance offering. The product is designed to control how employees and AI agents access company software and data.

Runlayer and Rippling fought over an MCP gateway

Runlayer emerged from stealth in November 2025 and has raised $42 million from investors including Khosla Ventures and Felicis. The startup is led by Andrew Berman, whose previous companies include baby-monitor maker Nanit and Vowel, an AI video-conferencing company whose team was acquired by Zapier in 2024.

According to Runlayer’s lawsuit, Rippling spent about a year evaluating its MCP gateway, with engineers from the two companies working closely during the trial. Rippling ultimately did not become a customer. Runlayer later alleged that Rippling was developing a competing product and had violated agreements governing the evaluation.

An MCP gateway acts as a controlled connection between AI agents and enterprise software. It can retrieve information requested by an agent while applying controls such as employee permissions, access policies, logging, and usage monitoring, rather than granting an AI system unrestricted access to company applications.

Both companies abandoned their claims

Rippling responded to Runlayer’s lawsuit with its own case, alleging that Runlayer infringed several patents. After roughly three weeks of discovery in Runlayer’s case, both companies dropped their respective lawsuits without a financial settlement.

Rippling then publicised the launch of its competing product, extending the company’s push beyond its traditional payroll and benefits software into AI infrastructure and security.

Runlayer, meanwhile, is pursuing a broader enterprise agent-security strategy around its gateway. Its platform includes tools for creating and managing agents, as well as for identifying unauthorised or unknown AI agents operating within a company.

The dispute also illustrates a growing challenge for AI startups selling technology to large software companies. Lengthy product evaluations can give prospective customers months to reassess their needs, while rapid AI development has made it easier for technically capable companies to build competing tools internally.