Eliza Labs demand

Eliza Labs and its founder, Shaw Walters, are demanding the X of Elon Musk, claiming that the company cheated them to deliver technical details about their AI tools, then banned them from the platform and launched imitators.

The demand says that X unfairly used his monopoly power, damaged Eliza’s reputation, blocked her access to customers and investors and benefited from Eliza’s innovations. Eliza Labs is not naming a figure in dollars, but asks the court to make X return its “bad earnings obtained”, pay the losses of Eliza and add damage to acute and punitive damage at the top.

Eliza Labs is the company behind Elizaos, an open source frame to build self -employed agents that can interact and perform tasks in blockchain networks.

The complaint, presented on Wednesday at the US District Court.

The lawsuit states that at the beginning of 2025, X invited Walters to meet after Eliza’s open source tools gained traction with developers. The platform allows users to build 3D autonomous and avatars agents with chat in real time, voice, video and telephone integration.

Shortly after, X allegedly demanded a business license of $ 50,000 per month to continue operating on the platform, before suspending the accounts of Eliza Labs and Walters for violating the terms and conditions of X. The internal messages cited in the complaint show an executive warning X that Eliza Labs had triggered legal actions for the API choice, the customers of the government not verified and the cases of use not approved. Eliza Labs said X offered to stop this process in exchange for new conversations.

While the accounts remained inactive, Walters says that X continued requesting technical documentation under the appearance of solving the problem, then he launched almost identical agents under his XAI brand.

According to legal expert Kelly Lawton-Abbott, partner of the SSM law firm, the lawsuit opens new lands in the space of AI, but faces long probabilities.

“There are not many cases in the space of AI about anti -petitive behavior,” said Lawton-Abbott Decipher. “Because Eliza is an open source software platform, they do not have the same protection of their software they would have if it were property.”

According to Lawton-Abbott, the burden of evidence in federal anti-protection claims is high. “For antimonopoly, it is a fairly high standard,” he said. “I think it will be difficult for them to succeed.”

Even so, Lawton-Abbott said the demand can be more leverage than litigation. “I wouldn’t expect this to advance,” he said. “I think it will probably be leverage for an agreement.”

Lawton-Abbott also recognized the dynamics of underlying power among companies.

The lawsuit states that X never responded to Eliza Labs’s request to restore their accounts, and instead launched their own AI agents with similar characteristics. In July, the Artificial Intelligence Division of X, XAI, launched “Companions”, a new feature in the Grok Chatbot application. The launch included Ani, a Gothic avatar of anime style that greets users with “Hello, baby.” and Rudy, a red panda that uses sweatshirts for more playful interactions.

X Corp. has not responded publicly to the complaint. However, his AI tool, Grok, was optimistic about Eliza prevailing in court.

“This case has intriguing hooks, but faces the uphill battles, especially against a platform like X with deep pockets and preceding defenses.” Said. “In general, this has a 40-50% chance to survive: fraud/UCL statements are more sticky than antitrust, which often fails against technological giants.”