Google moonshot spinout SandboxAQ claims a former exec is attempting ‘extortion’ | TechCrunch

A former SandboxAQ executive filed a wrongful dismissal lawsuit last month filled with such outrageous allegations against the company’s famed CEO, Jack Hidary, that the plaintiff himself redacted the most salacious details.

On Friday, the company’s lawyers filed a blistering response, calling the former employee a “serial liar” and stating that his lawsuit “alleges false claims for improper and excessive purposes.”

Even the visible portions of the lawsuit — which TechCrunch obtained — contain accusations that would raise eyebrows should a court deem them valid. (A A copy of the lawsuit is available here.)

The case offers a rare glimpse into how employee lawsuits can become a public airing of dirty laundry from otherwise opaque internal events, thanks to Silicon Valley’s ubiquitous private arbitration clauses in employee agreements.

The suit was filed in mid-December by Robert Bender. Bender worked as Hidary’s chief of staff from August 2024 through July 2025, the complaint said. He claims in his lawsuit that he was wrongfully fired after raising concerns about a number of alleged incidents, some of which, he said, involved “sexual encounters” and others, he claims, involving the presentation of misleading financial information to investors.

For its part, SandboxAQ strongly denies the allegations. The company’s attorney, Orin Snyder, a well-known partner at law firm Gibson Dunn, tells TechCrunch: “This case is a complete fabrication. We look forward to debunking these baseless allegations and exposing the lawsuit – as detailed in our response – for what it is: an opportunistic and excessive abuse of the judicial process.”

What makes the case particularly notable is the number of Valley heavy hitters involved in SandboxAQ. The company is an AI quantum computing startup that started as a moonshot unit of Google parent company Alphabet, led at Google by Hidary. Hidary is also known in Silicon Valley as a board member of the X Prize.

SandboxAQ was spun off from Alphabet in March 2022 into an independent company with Hidary as CEO and quickly attracted major investors, including billionaire and former Google CEO Eric Schmidt, who invested and became chairman of the startup. Other billionaire investors include Marc Benioff, CEO of Salesforce, venture capitalist Jim Breyer and Ray Dalio, founder of the Bridgewater hedge fund.

Bender’s lawyers weigh in another court document that the redacted sections “describe sexual encounters and the physical condition of non-partisan individuals observed by Plaintiff during business trips.” In other words, the alleged incidents involve people whom Bender is not suing. This is an unusual move; typically, it is the party being sued who requests redaction, not the person making the accusations.

Several explanations exist for such a tactic, and TechCrunch was unable to determine what the motivations are in this case. In general, options range from protecting innocent third parties not accused of wrongdoing to a shakedown strategy – indicating that even more damaging details may emerge if the defendants do not offer an acceptable settlement.

The unredacted portion of the lawsuit provides a few more general details of the allegations that were covered up: Bender alleges that Hidary used company resources and investor funds to “recruit, transport and entertain female companions.” In an attachment to a text message from Bender, he mentions prostitutes.

Bender further alleges in his lawsuit that Hidary sold tens of millions of dollars worth of stock at an inflated price based on what Bender said were misleading figures presented to potential investors. He claims in the lawsuit that the revenue figures presented to the board were 50% lower than those shown in presentations to potential investors.

SandboxAQ’s attorneys vigorously dispute all of the above. “The Company made no fraudulent communications to investors regarding its takeover bid or otherwise. The CEO did not misuse Company assets. Plaintiff fabricated these inflammatory allegations to manufacture legal claims and protect himself from the consequences of his own misconduct.”

Bender, in turn, claims the company is trying to defame him. His complaint alleges that he filed his lawsuit “solely because his termination was followed by a malicious scorched earth campaign to destroy his reputation.”

While the validity of all these allegations is for a jury to decide, many of his claims echo an investigative report on SandboxAQ published by The information in July.

Sources told The Information that Hidary used company resources to fly women he was dating on corporate jets, and that the company’s revenues were far below expectations. Bender refers to the Information story in his lawsuit, but denies that he was a source for it. SandboxAQ claims he was a source and lies about his involvement. (A copy of SandboxAQ’s full corporate response, including more allegations about the employee, can be found found here.)

Despite any controversies, major investors were keen to invest in the company last year. SandboxAQ will be released in April raised more than $450 million in a Series E funding round from Ray Dalio, Horizon Kinetics, BNP Paribas, Google and Nvidia.

SandboxAQ too announced a $90 million secondary sale. SandboxAQ has raised a total of $1 billion, it saysand is valued at $5.75 billion, according to PitchBook estimates.