Software developer Eliza Labs has sued Elon Musk’s X Corp, accusing it of extracting valuable information from the company before suspending its account on the social media platform and launching copycat AI products.
According to the lawsuit filed yesterday in the federal court in San Francisco, X duped Eliza into sharing its technological expertise related to so-called AI agents that operate on social media platforms.
Eliza, founded last year, developed an open-source platform for creating, deploying and managing AI agents, which can take actions on their own and adapt, unlike traditional software.
The lawsuit said X violated antitrust law, accusing it of suppressing competition by abusing its social media dominance to eliminate a rival and charge more for its products.
Representatives for X and Eliza did not immediately respond to requests for comment.
The lawsuit said X reached out to Eliza last year to discuss AI agents operating on X’s platform. Eliza and its founder Shaw Walters, who is also a plaintiff, said they shared extensive details about the company’s development roadmap and vision for AI agents.
X allegedly told Eliza it would have to pay $50,000 a month for an enterprise license to continue operating on the platform. The lawsuit said X was coercing developers into paying “exorbitant” prices to avoid being booted from the site.
Eliza said its ouster from the platform in June harmed its relationship with customers and curtailed the company’s growth.
Previewing a potential defense in the case, Eliza said X should not be accorded immunity under a federal law provision known as Section 230. The measure, frequently invoked by technology companies, can block claims against online platforms over their publishing decisions and hosting of third-party content.
Eliza said its ouster from X was not a publishing decision but instead a “calculated and cunning” move to destroy competition.
