The startup Eliza Labs, which specializes in developing artificial intelligence products, has initiated a lawsuit against X Corp, owned by Elon Musk. In an official statement to the federal court in San Francisco, the company accuses X Corp of using its dominant market position to eliminate competitors and unlawfully block accounts.
This is reported by Finway
Lawsuit: Allegations of Monopoly and Copying Solutions
According to Eliza Labs, X Corp initially gained access to the startup’s technical information and then launched its own versions of its AI products. Following this, the accounts of Eliza Labs and its founder, Shaw Walters, were blocked on the X Corp platform. The lawsuit also notes that prior to the blocking, Musk’s company demanded that the startup purchase an Enterprise license or API for $50,000 per month, amounting to $600,000 per year.
“This case concerns how X Corp exercises its incredible monopoly power, considering itself immune from lawsuits, to deny users access in order to stifle competition in the field of launching AI agents on the X Corp platform,” the lawsuit states.
In the document, Eliza Labs claims it refused to pay for such a license, deeming it an unlawful demand. The startup interprets X Corp’s actions as a “coordinated, fraudulent, and anti-competitive attempt” to gain access to finances and confidential information about open-source software development.
Context and Previous Legal Disputes Involving X Corp
Eliza Labs is known for the open protocol elizaOS for autonomous AI agents, valued at $2.5 billion, as well as a platform for creating AI agents without programming, which launched in April. Eliza Labs’ lawsuit is the latest in a series of similar cases concerning Musk’s business structures. Notably, the blockchain game distributor Xai — the company Ex Populus — is also suing Musk’s xAI, accusing it of trademark infringement. Meanwhile, Musk recently filed a lawsuit against Apple and OpenAI over the “monopoly of ChatGPT” on the iPhone.