Eliza Labs Files Lawsuit Against Elon Musk’s X

Eliza Labs, formerly known as AI16z, is taking legal action against Elon Musk’s X, claiming that the social media platform deplatformed Eliza accounts to squeeze out its competitors in the AI agent space.

The lawsuit comes as a result of xAI’s new AI Agent character, Ani, which Eliza Labs claims was released “immediately” after X accessed private knowledge of the Eliza Labs AI Agent code following a cease-and-desist order it sent to Eliza. The suit claims that X carried on these communications throughout June, July, and August to “pump Eliza Labs for information about creating, developing, building, and deploying AI Agents.”

xAI’s pilot AI companion chatbot, Ani, was released in July.

The filing goes on to state that while the company’s lead, Shaw Walters, and Eliza Labs complied with a cease and desist order in good faith, “X refused to reactivate Eliza Labs’ and Shaw Walters’ accounts.”

Shaw Walters’ X Account

Shaw released a statement yesterday saying that he met with X at their HQ to discuss and collaborate in the AI agent space, considering Eliza Labs found great success by using X’s free API.

According to Shaw, the collaborative tone shifted over time to what he calls “max extraction,” where X eventually demanded framework access, documentation and implementation details in return for account reinstatement.

“And then they ghosted us. We followed up week after week. They decided that instead of giving us any decision at all, they'd just drag this on while they hurt our business and gained market share for their own product. Now, we are left with no other option. X and xAI realize this on some level – they just filed a lawsuit alleging that Apple and OpenAI are doing the same anticompetitive conduct to them that X is doing to us,” Walters concluded.

Eliza Labs and the AI16z token were among the biggest winners during the AI agent craze in Q4 2024, with the AI16z token reaching a $2.4 billion valuation in January, before tumbling alongside the rest of the AI agent and memecoin space. AI16z now changes hands at a $100 million valuation.

AI16z Chart - CoinGecko

The company rebranded from AI16z to ElizaOS in January following a request from tech venture capital firm Andreessen Horowitz (A16z), and Eliza Labs launched its own “No-Code” AI agent launch platform in April, known as Autofun.