AI startup %ElizaLabs has filed an antitrust lawsuit against Elon Musk’s X Corp (formerly Twitter), taking the matter to the U.S. District Court for the Northern District of California on August 28, 2025.
Founded in 2024, Eliza Labs gained prominence with its open-source platform %elizaOS, which allows users to develop autonomous, adaptive %AI agents on social media – cutting-edge tools designed for a rapidly evolving AI landscape. The suit alleges that X Corp orchestrated a deceptive collaboration. Under the guise of potential partnership, X allegedly coaxed Eliza into revealing proprietary technical information before abruptly terminating the company’s account and launching competing AI products.
Eliza Labs claims that X used its dominant platform power to thwart competition, first demanding an exorbitant $50,000 per month enterprise license – equating to $600,000 annually – and then suspending Eliza’s access when the demand was declined. According to Eliza, this move not only severed vital customer relationships but also stunted the startup’s business growth.
Crucially, Eliza argues that X’s actions are not safeguarded by Section 230 of the Communications Decency Act – a common legal shield for platforms – because the removal was not a matter of content moderation but a calculated attempt at competitive sabotage.
Titled Eliza Labs Inc et al v. X Corporation (No. 3:25‑cv‑07243‑TSH), the case is currently pending, with no legal representation yet entered for X Corp. If their claim succeeds, Eliza Labs could set a precedent in the struggle between nascent AI innovators and powerful tech platforms, raising urgent questions about fair competition and intellectual property protection.
