TL;DR
- Eliza Labs filed a lawsuit against X Corp, accusing Elon Musk’s company of copying its technology and suspending its accounts to limit competition.
- The company refused to pay a $50,000-per-month enterprise license and shortly afterward lost access to its accounts, which it described as an anticompetitive move.
- In April, the firm launched a no-code platform to design artificial intelligence agents.
Eliza Labs filed a complaint against X Corp in a federal court in San Francisco. The artificial intelligence software company alleges that Elon Musk’s platform used key technical information to develop similar products and then suspended its accounts to restrict competition.
The lawsuit was filed by the company and its founder, Shaw Walters, who claim that X exercised monopoly power by blocking them after they refused to pay an enterprise license deemed excessive.
According to the court filing, X pressured the company to purchase a corporate service costing $50,000 per month, or $600,000 per year. Eliza declined those terms and shortly afterward lost access to both its corporate account and the personal account of its founder. Walters argues that the action had no legitimate justification and was part of a scheme to exclude a competitor from the platform.
The plaintiffs maintain that the suspension was not an isolated incident but part of a coordinated plan to extract money and technical intelligence about open-source software development. In the court filing, they described X’s actions as fraudulent and anticompetitive and warned that Musk’s company acted under the assumption it could remove other projects without facing immediate legal consequences.
A Setback to Eliza’s Rapid Growth?
Eliza Labs gained prominence in recent months for developing elizaOS, a protocol for autonomous AI agents valued at $2.5 billion. In April, it also launched a no-code creation platform that allows users to design advanced AI agents without programming knowledge, expanding its user base and drawing attention from the tech sector.
The dispute now moves to the courts, where it will be determined whether X used its dominant position to harm an emerging competitor in the artificial intelligence industry
