Eliza Labs, an AI software company, has sued X Corp, alleging that the social media platform “wielded its incredible monopoly power” to suspend Eliza’s account after extracting valuable knowledge from the AI firm.
In a Wednesday filing with the federal court in San Francisco, Eliza Labs and its founder, Shaw Walters, claimed that X launched copycat AI products after obtaining key technical information from Eliza and then removing the company from the X platform.
“This case involves X Corp wielding its incredible monopoly power with perceived immunity from suit to deplatform users with the intent to restrain competition for launching AI Agents on the X Corp platform,” the filing said.
The plaintiffs argued that X suspended the accounts of both Eliza Labs and Walters without warning or legitimate justification.
“In the weeks leading to the deplatforming, X began to push plaintiffs to adopt an exorbitantly expensive ‘Enterprise License’ or ‘Enterprise API’ (for $50,000/month, or $600,000.00/year),” Eliza said in the filing, adding that it declined to pay for such services.
Eliza suggested that X’s move “constituted a coordinated, fraudulent, and anticompetitive effort” to obtain money and technical intelligence from the plaintiffs regarding their open-source software development processes.
The Block has reached out to X and Eliza Labs for comment.
Eliza Labs is the creator of the $2.5 billion-valued elizaOS open-source protocol for autonomous AI agents. In April, it launched a no-code AI agent launchpad that enables users to develop advanced AI agents without requiring coding knowledge.
© 2025 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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