The startup Eliza Labs and its founder, Show Walters, have filed a lawsuit against X Corp, owned by Elon Musk. The complaint was filed in the federal court in San Francisco, alleging abuse of monopoly power, driving a competitor out of the market, and unlawfully blocking accounts.
This is reported by Business • Media
Allegations of product copying and licensing demands
According to the plaintiffs, X Corp initially gained access to Eliza Labs’ technical information and then released its own artificial intelligence products that replicate the startup’s developments. Following this, the accounts of Eliza Labs and its founder were deleted from the platform.
“This case concerns how X Corp wields its incredible monopoly power, believing itself immune from lawsuits, to deny users access in order to stifle competition in the field of AI agent launches on the X Corp platform,” the lawsuit states.
The lawsuit documents indicate that before deleting the accounts, X Corp demanded that Eliza Labs purchase an Enterprise license or API for $50,000 per month, or $600,000 per year, which the startup described as an “extremely expensive” condition.
Escalation of the conflict and other lawsuits
Eliza Labs views X Corp’s actions as a “coordinated, fraudulent, and anti-competitive attempt” to gain financial benefits and technical information regarding open-source software. The startup is known for its product elizaOS — an open protocol for autonomous AI agents, valued at $2.5 billion, as well as the launch of a no-code AI agent creation platform that took place in April.
Eliza Labs’ case against X Corp is complemented by other lawsuits related to Elon Musk’s business structures. In particular, the company Ex Populus, which distributes blockchain games for Xai, has filed a lawsuit against xAI, accusing it of trademark infringement. At the same time, Elon Musk, through X Corp and xAI, has initiated lawsuits against Apple and OpenAI, claiming a “monopoly of ChatGPT” on the iPhone.