Last summer, a sign appeared on the door to a stuffy, windowless room at the office of Manhattan artificial-intelligence startup Clarifai. “Chamber of secrets,” it read, according to three people who saw it.

The notice was a joking reference to how the small team working inside was not permitted to discuss its work with others at Clarifai. Former and current employees say the group was working on a controversial Pentagon project using machine-learning algorithms to interpret drone-surveillance imagery—and that Clarifai’s secrets were less safe than they should have been.

A lawsuit filed by former employee Amy Liu this month alleges that Clarifai’s computer systems were compromised by one or more people in Russia, potentially exposing technology used by the US military to an adversary. The lawsuit says Clarifai learned of the breach last November, but that Clarifai’s CEO and other executives did not promptly report it to the Pentagon.

In her complaint, Liu, a former Air Force captain who worked in military intelligence, says she was unfairly terminated from her position as director of marketing for arguing that the company needed to disclose the incident. Another former employee told WIRED that his concerns over executives’ handling of the hack prompted him to leave the company.

Clarifai was working on a piece of Project Maven, former and current employees say, a Pentagon effort to infuse the US military with AI. Project Maven has triggered dissent inside Google, which took on a similar drone-analysis contract. More than 4,500 Google employees signed a letter protesting the project, saying they don’t want Google’s technology to potentially help kill people. The outcry prompted the company to issue ethical guidelines governing use of its AI technology, and promise not to renew its Project Maven contract when it expires next year.

Clarifai initially declined to comment on whether it had worked on Maven. After WIRED revealed the company's contract, CEO Matt Zeiler confirmed it in a post on the startup's blog. In the blog post, Zeiler said the security incident involved an “untargeted bot” that had infected a research server and did not access any data or code. Zeiler said Clarifai notified customers, including the Pentagon, after completing an assessment of the incident and an outside audit. 1

Zeiler, a PhD who studied machine learning alongside professors who later became top AI researchers at Google and Facebook, founded Clarifai in 2013. The startup offers companies image recognition for tasks such as identifying celebrities and food.

Liu says she understands why the US military needs to expand its use of AI technology. She also says that the lack of transparency and poor security she witnessed at Clarifai made it an unsuitable place to help with that. “If now Google’s out of the running, and all they have left is companies like Clarifai, that’s sad and scary,” Liu says.

In response to questions about its approach to developing AI technology, a spokesperson referred WIRED to a statement of Clarifai’s core values on its website. They describe the company as “driven by our mission to accelerate the progress of humanity with continually improving AI.” In his blog post, Zeiler said the company took on its Maven contract because it was aimed at saving the lives of civilians and soldiers.

Liu says she was drawn into Clarifai’s military work when she helped draft Clarifai’s pitch for the Maven contract in June 2017. The paper argued that technology Clarifai had developed for commercial clients could be adapted to do things like detecting and counting cars and people in drone imagery. Liu says Clarifai won a six-month, $7 million contract last summer. Like Google, Clarifai worked on Maven as a subcontractor to ECS Federal, an IT contractor headquartered in Fairfax, Virginia.

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The Maven contract was a big win for Clarifai. An internal document from late 2017 shows that most of the startup’s deal prospects were less than $100,000. But Liu and others familiar with the project say executives obscured the fact Clarifai had become involved in military work, describing the project generically as a government contract that could save lives. Two people who worked on the project say they were not initially informed that the surveillance technology they were building was for the military.