Eliza Labs sues X over AI agent account suspensions
Eliza Labs and its founder Shaw Walters filed a federal lawsuit against X Corp on August 27, accusing the social media platform of anticompetitive practices related to AI agent development.
The complaint, filed in the Northern District of California under case number 3:25-cv-07243-TSH, alleges X violated Section 2 of the Sherman Act and California's Unfair Competition Law. The lawsuit also includes claims of intentional misrepresentation, false promise, and concealment.
According to court documents, X approached Eliza Labs for meetings about AI agents on the platform. During these discussions, X allegedly obtained technical details about Eliza's development roadmap and coding methods. The San Francisco-based company says X then demanded they purchase an Enterprise API license costing $50,000 per month, or $600,000 annually.
Eliza Labs declined the enterprise license, stating they were already paying for developer access and verification services. Shortly after refusing the upgrade, both the company's account and Walters' personal account were permanently suspended without warning in June.
The plaintiffs claim X used the technical information gathered during their meetings to develop similar AI agent features for the platform. The complaint describes X as "wielding its incredible monopoly power to deplatform users with the intent to restrain competition" in AI agents. It further alleges a "coordinated, fraudulent, and anticompetitive effort" to obtain money and technical intelligence before launching "nearly identical AI Agents."
Eliza Labs develops elizaOS, an open-source framework for autonomous agents. In April, the company launched a no-code platform that allows users to create AI agents without programming knowledge.
The lawsuit seeks several remedies, including immediate reinstatement of the suspended accounts, injunctive relief to prevent further anticompetitive behavior, monetary damages, and treble damages under antitrust law.
As of the filing date, no attorney had entered an appearance to represent X Corp in the case. The complaint identifies X.AI as a relevant nonparty connected to X's agent development initiatives.
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