Eliza Labs Sues X Corp Over Account Suspension

Eliza Labs, an AI software company, has initiated legal action against X Corp, claiming that the social media giant abused its monopoly power to suspend Eliza’s account after acquiring sensitive information from the firm. In a filing submitted on Wednesday to the federal court in San Francisco, Eliza Labs and its founder, Shaw Walters, allege that X Corp launched imitation AI products after extracting vital technical data from Eliza and subsequently removing the company from its platform. The lawsuit contends that X Corp used its dominant market position with a sense of immunity to deplatform users, aiming to stifle competition in the AI sector on its platform. According to the filing, X suspended both Eliza Labs’ and Walters' accounts without prior notice or valid justification. Eliza Labs noted that leading up to the suspension, X pressured them into purchasing an expensive 'Enterprise License' or 'Enterprise API' costing $50,000 per month, a proposal Eliza ultimately rejected. The company claims that X's actions represent a calculated, deceptive, and anticompetitive strategy to extract financial resources and technical intelligence regarding their open-source software development processes. Eliza Labs is renowned for its $2.5 billion open-source protocol, elizaOS, designed for autonomous AI agents. In April, the company introduced a no-code platform that allows users to create advanced AI agents without programming skills. Disclaimer: The Block is an independent media outlet delivering news and data. As of November 2023, Foresight Ventures is a majority investor in The Block. Foresight Ventures invests in various crypto entities, among which crypto exchange Bitget is a key partner. The Block operates independently to provide unbiased information about the crypto industry. Financial disclosures are available on request.