Eliza Labs, formerly AI16z, is suing Elon Musk’s X, alleging that the platform deplatformed its accounts to undermine competition in the AI agent market. The lawsuit follows the launch of xAI’s AI companion, Ani, which Eliza claims was initiated after X accessed its proprietary agent code post a cease-and-desist order. Eliza’s lead, Shaw Walters, asserts that X initially sought collaboration but shifted to demanding sensitive information for account reinstatement. Despite complying with the order, Eliza claims X has refused to reactivate its accounts, significantly harming its business. The suit also references X’s allegations against other tech giants like Apple and OpenAI for similar antitrust actions. Eliza Labs previously thrived during the AI boom, with its AI16z token peaking at a $2.4 billion valuation. Since rebranding to ElizaOS in January and launching Autofun for no-code AI development, it now faces steep valuation drops, dropping to $100 million.
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