Young Founders Make History as Billionaires with AI Recruiting Startup Mercor

In a stunning turn of events that has captivated Silicon Valley, three 22-year-old entrepreneurs have become the world’s youngest self-made billionaires after their AI recruiting startup Mercor secured a $350 million funding round, valuing the company at an astonishing $10 billion. Brendan Foody (CEO), Adarsh Hiremath (CTO), and Surya Midha (Board Chairman) – a trio of Bay Area high school friends who once competed together on their debate team – have each acquired approximately 22% stakes in the company they founded just last year. “It’s definitely crazy,” Foody told Forbes in a recent interview. “It feels very surreal. Obviously beyond our wildest imaginations, insofar as anything that we could have anticipated two years ago.” Their achievement is particularly remarkable as they’ve unseated Mark Zuckerberg’s long-standing record of becoming a billionaire at age 23, with Midha being the youngest of the three by about two months. The only self-made entrepreneur to debut at a younger age was Kylie Jenner at 21, though Forbes later revised her status after investigating claims that her cosmetics company’s revenue had been inflated.

The rise of Mercor exemplifies the extraordinary opportunities created by the AI boom, especially for young entrepreneurs willing to abandon traditional paths. All three founders are recipients of the Thiel Fellowship, a program created by conservative billionaire investor Peter Thiel that provides $100,000 grants to young people who forgo college to pursue entrepreneurial ventures. Hiremath, who spent two years at Harvard before dropping out, reflected on his dramatic life change: “The thing that’s crazy for me is, if I weren’t working on Mercor, I would have just graduated college a couple months ago. My life did such a 180 in such a short period of time.” Their youth-driven success story continues a Silicon Valley tradition of celebrating young founders, though even by these standards, Mercor stands out. The company’s meteoric rise has made its founders the new poster children for twenty-something entrepreneurs in the AI era, surpassing recent young billionaires like Polymarket’s Shayne Coplan (27), Scale AI’s Alexandr Wang (28), and Scale AI co-founder Lucy Guo, who at 30 became the world’s youngest self-made woman billionaire, taking that distinction from Taylor Swift.

When Mercor was founded in 2023, its original mission was relatively straightforward: matching engineers in India with U.S. companies seeking freelance coding talent. The founders built a recruiting platform featuring AI avatars that conducted interviews and matched applicants to companies. However, their big break came when they unexpectedly entered the highly demanded field of data labeling, connecting expert-level contractors – including Ph.Ds and lawyers – with frontier AI labs like OpenAI. This pivot proved extraordinarily lucrative. By September, shortly after Mercor made its debut on Forbes’ Cloud 100 list of top private cloud computing companies, Foody announced the company had reached $500 million in annualized revenue run rate, a remarkable five-fold increase from the $100 million reported in March. The company’s explosive growth attracted significant attention from investors, culminating in their recent funding round led by Felicis Ventures, with participation from Benchmark, General Catalyst, and Robinhood Ventures.

Mercor’s rise coincides with significant upheaval in the data labeling industry. In June, Meta’s acquisition of a 49% stake in industry giant Scale AI for $14 billion and the poaching of its CEO Alexandr Wang created a significant power vacuum and strategic opportunity. This development emboldened smaller players like Mercor to pursue more aggressive growth strategies, arguing that frontier AI labs would hesitate to work with vendors closely tied to Meta and its competing AI ambitions. The competitive landscape remains fierce, with several notable players vying for market share. Surge, founded in 2016, has reportedly been in talks to raise funding at a $30 billion valuation, potentially making its founder Edwin Chen the youngest billionaire on the Forbes 400 list. Meanwhile, Turing AI secured a $2.2 billion valuation after raising $110 million in July, and Invisible, valued at $500 million in 2023, has established itself as a preferred partner for OpenAI and Microsoft.

The intense competition has also sparked controversy and legal battles. In September, Scale AI filed a lawsuit against Mercor, alleging theft of trade secrets. The suit also names a former Scale executive who left to join Mercor and allegedly shared over 100 confidential documents with his new employer. When asked about the complaint, Foody downplayed its significance, stating, “It’s not something we spend a lot of time thinking about.” Despite the legal challenges, Mercor continues to focus on its explosive growth and market expansion, leveraging its founders’ deep understanding of the tech ecosystem. As Bay Area natives, Foody, Hiremath, and Midha grew up immersed in the tech world – all three are children of software engineers. Foody’s mother worked for Meta’s real estate team, while his father founded a graphics interface company in the 1990s before becoming a startup advisor. Foody himself showed early entrepreneurial spirit, starting a venture at age 16 that secured AWS promotions for his friends, charging $500 each. Hiremath and Midha have been friends since elementary school, initially meeting through debate tournaments at age 10, later connecting with Foody through high school debate. Hiremath developed his interest in labor markets while at Harvard, conducting research for Larry Summers, the former Treasury Secretary and current OpenAI board member, who later became an investor in Mercor.

Despite their newfound billionaire status, the Mercor founders maintain that they haven’t indulged in any extravagant purchases – not because of fiscal restraint, but simply because they lack the time. Their dedication to growing their company remains all-consuming, with Foody revealing, “I leave the office around like 10:30 [p.m.], on an average day, six days a week. And so there’s not a whole lot of time outside of that to be distracted by things outside of the business.” This relentless work ethic reflects the intensity of their ambition and the competitive pressure they face in the rapidly evolving AI industry. As they navigate the challenges of hypergrowth, industry competition, and legal disputes, these young billionaires represent a new generation of tech entrepreneurs capitalizing on the transformative potential of artificial intelligence while redefining what’s possible for founders barely out of their teenage years.