Eliza Labs<\/a>, formerly known as AI16z<\/a>, is taking legal action against Elon Musk\u2019s X, claiming that the social media platform deplatformed Eliza accounts to squeeze out its competitors in the AI agent space.<\/p>\n The lawsuit<\/a> comes as a result of xAI\u2019s new AI Agent character, Ani, which Eliza Labs claims was released \u201cimmediately\u201d 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 \u201cpump Eliza Labs for information about creating, developing, building, and deploying AI Agents.\u201d<\/p>\n xAI\u2019s pilot AI companion chatbot, Ani, was released in July.<\/p>\n The filing goes on to state that while the company\u2019s lead, Shaw Walters, and Eliza Labs complied with a cease and desist order in good faith, \u201cX refused to reactivate Eliza Labs\u2019 and Shaw Walters\u2019 accounts.\u201d<\/p>\n 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\u2019s free API. <\/p>\n According to Shaw, the collaborative tone shifted over time to what he calls \u201cmax extraction,\u201d where X eventually demanded framework access, documentation and implementation details in return for account reinstatement. <\/p>\n \u201cAnd 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 \u2013 they just filed<\/a> a lawsuit alleging that Apple and OpenAI are doing the same anticompetitive conduct to them that X is doing to us,\u201d Walters concluded.<\/p>\n Eliza Labs and the AI16z token were among the biggest winners during the AI agent craze<\/a> 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.<\/p>\n![\"AI16z](\"https:\/\/thedefiant.io\/_next\/image?url=https%3A%2F%2Fcdn.thedefiant.io%2Fpasted-1756493011965-png-c8452b69-1494-47f2-b865-0e342dfe348b.png&w=3840&q=100\"\/)