Google Moonshot spinout SandboxAQ claims former executive attempts ‘extortion’

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

The company’s lawyers filed a scathing response Friday, calling the former employee a “serial liar” and saying his lawsuit “alleges false statements for improper, money-extorting purposes.”

Even the visible portions of the lawsuit — which TechCrunch obtained — contain allegations that would raise eyebrows, if a court found 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 the ubiquitous private arbitration clauses in Silicon Valley employee agreements.

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

For its part, SandboxAQ vehemently denies these allegations. The company’s attorney, Orin Snyder, a well-known partner at the Gibson Dunn law firm, told 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 extortionate abuse of the legal process.”

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

SandboxAQ spun off from Alphabet and became an independent company in March 2022 with Hidary as CEO and quickly attracted high-profile 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, Jim Breyer, venture capitalist, and Ray Dalio, founder of hedge fund Bridgewater.

Bender’s lawyers say another court document that the redacted sections “describe the sexual encounters and physical condition of non-parties observed by the plaintiff during a business trip.” In other words, the alleged incidents involve people Bender is not pursuing. This is an unusual move: Typically, it is the party being sued who requests redactions, not the person making the allegations.

There are various explanations for such a tactic, and TechCrunch could not determine what the motivations are in this case. Broadly speaking, the possibilities range from protecting innocent third parties who are not accused of wrongdoing to a restructuring strategy – signaling that more damaging details could emerge if defendants do not offer an acceptable settlement.

The unredacted portion of the complaint provides some more general details about the allegations that were withheld: Bender alleges that Hidary used company resources and investor funds to “solicit, 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 his stock at a premium based on what Bender believes were misleading numbers presented to potential investors. He claims in the suit that the revenue numbers presented to the board were 50% lower than the numbers presented in presentations to potential investors.

SandboxAQ’s attorneys vigorously dispute all of the above. “The Company did not make fraudulent disclosures to investors regarding its tender offer or otherwise. The CEO did not misuse the Company’s assets. Plaintiff fabricated these inflammatory allegations to fabricate statutory claims and protect himself from the consequences of his own misconduct.”

Bender, for his part, claims the company tried to defame him. His complaint claims he filed the lawsuit “solely because his termination was followed by a malicious scorched earth campaign to destroy his reputation.”

While the validity of each of these allegations is up to the jury, many of his assertions echo an investigative report on SandboxAQ published by The information in July.

Sources told The Information that Hidary was using company resources to fly women he dated on corporate jets, and that the company’s revenue was far below his projections. Bender references The Information story in his lawsuit but denies being the source. SandboxAQ claims he was a source and lies about his involvement. (A copy of SandboxAQ’s full company response, including other allegations regarding the employee, can be found here.)

Despite the controversies, large investors were eager to invest in the company last year. In April, SandboxAQ 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 raised a total of $1 billion, it saysand is valued at $5.75 billion, according to PitchBook estimates.