Eliza Labs, the venture capital firm behind the famous meme coin DAO ai16z, filed an antitrust lawsuit against X, the social media platform owned by Musk, this morning on 8/29. They accuse X of using cooperation as a pretext to actually exploit its technology and demand high licensing fees, ultimately suspending accounts and launching competing products. The legal battle is currently ongoing in the federal court in San Francisco, USA.
Negotiations turned into extortion, threatening to suspend if the 600,000 authorization fee is not paid.
Eliza Labs, established in 2024, focuses on the research and development of "AI agents" ( AI agents ). In the same year, Musk's X actively expressed a willingness to collaborate and invited founder Shaw Walters to share product blueprints and future plans with the X team. However, this was followed by a heated argument, which subsequently led to a legal battle.
According to a post by a user on X, a picture of a lawsuit statement released by Walters, the founder of Eliza Labs, on Discord shows that Walters pointed out that in February of this year, he was invited to the X headquarters for talks. What initially seemed like a positive atmosphere and a simple discussion about collaboration turned into X demanding that Eliza pay in order to continue the partnership.
X requires Walters to pay a monthly fee of 50,000 USD and an annual fee of 600,000 USD for the corporate license (, otherwise AI agents cannot operate on X. Walters emphasizes that Eliza is an open-source project and is not intended for sale, and in the past, the licensing fee was about 20,000 USD per year, but this time the charge is "outrageously high."
X requested technology from Eliza Labs, leading to suspension and a lawsuit.
Walters accused X of being heavily requested for technical documents during the collaboration process, including details related to the framework, usage, and endpoint )Endpoint(, during which there were also hints that "Eliza Lab's account on X would be restored." However, there was ultimately no response.
In June 2025, Eliza Labs' X account was suspended, disrupting the company's business and halting cooperation with customers, while the market was also taken over by X's own product Grok. Subsequently, on 8/27, Walter formally filed a lawsuit in the San Francisco federal court, accusing X of deliberately monopolizing the market, claiming it was no longer merely platform management, but rather a 'deliberately designed business suppression act.'
Section 230 has become a point of contention, with the founder calling for #freeEliza
Walters also preemptively challenges the possible invocation of Section 230 of the Communications Decency Act in the United States )Section 230( as a defense. Section 230 was originally a statute that protected community platforms, allowing them not to be held responsible for user content and to reasonably conduct content moderation, such as deleting misinformation or blocking violating accounts.
Walters thought that X might claim in court that the suspension of the Eliza Labs account was merely a general content management action, which is protected by law. However, Walters emphasized that this was not just a simple review, but that X deliberately used the rules to target competitors and exclude Eliza in order to launch similar products on their own, hence the defense.
The day after the complaint, Walters publicly stated on Discord that the code of Eliza Labs will continue to be open for use, will not change its vision, and will not leave, using #freeEliza as a rallying call. Currently, both X and Walter have not responded to media comments, and the subsequent direction of the case remains to be observed.
) Note: Section 230 of the Communications Decency Act in the United States refers to intermediaries such as social media platforms, forums, and search engines, stating that they are generally not legally responsible for the content published by users on their platforms. (
)OpenAI countersues Musk for long-term harassment, US court: Hearing scheduled for March next year(
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Musk X sued by Eliza Labs: cooperation turned into extortion, suspension for refusing to pay 600,000 in licensing fees.
Eliza Labs, the venture capital firm behind the famous meme coin DAO ai16z, filed an antitrust lawsuit against X, the social media platform owned by Musk, this morning on 8/29. They accuse X of using cooperation as a pretext to actually exploit its technology and demand high licensing fees, ultimately suspending accounts and launching competing products. The legal battle is currently ongoing in the federal court in San Francisco, USA.
Negotiations turned into extortion, threatening to suspend if the 600,000 authorization fee is not paid.
Eliza Labs, established in 2024, focuses on the research and development of "AI agents" ( AI agents ). In the same year, Musk's X actively expressed a willingness to collaborate and invited founder Shaw Walters to share product blueprints and future plans with the X team. However, this was followed by a heated argument, which subsequently led to a legal battle.
According to a post by a user on X, a picture of a lawsuit statement released by Walters, the founder of Eliza Labs, on Discord shows that Walters pointed out that in February of this year, he was invited to the X headquarters for talks. What initially seemed like a positive atmosphere and a simple discussion about collaboration turned into X demanding that Eliza pay in order to continue the partnership.
X requires Walters to pay a monthly fee of 50,000 USD and an annual fee of 600,000 USD for the corporate license (, otherwise AI agents cannot operate on X. Walters emphasizes that Eliza is an open-source project and is not intended for sale, and in the past, the licensing fee was about 20,000 USD per year, but this time the charge is "outrageously high."
X requested technology from Eliza Labs, leading to suspension and a lawsuit.
Walters accused X of being heavily requested for technical documents during the collaboration process, including details related to the framework, usage, and endpoint )Endpoint(, during which there were also hints that "Eliza Lab's account on X would be restored." However, there was ultimately no response.
In June 2025, Eliza Labs' X account was suspended, disrupting the company's business and halting cooperation with customers, while the market was also taken over by X's own product Grok. Subsequently, on 8/27, Walter formally filed a lawsuit in the San Francisco federal court, accusing X of deliberately monopolizing the market, claiming it was no longer merely platform management, but rather a 'deliberately designed business suppression act.'
Section 230 has become a point of contention, with the founder calling for #freeEliza
Walters also preemptively challenges the possible invocation of Section 230 of the Communications Decency Act in the United States )Section 230( as a defense. Section 230 was originally a statute that protected community platforms, allowing them not to be held responsible for user content and to reasonably conduct content moderation, such as deleting misinformation or blocking violating accounts.
Walters thought that X might claim in court that the suspension of the Eliza Labs account was merely a general content management action, which is protected by law. However, Walters emphasized that this was not just a simple review, but that X deliberately used the rules to target competitors and exclude Eliza in order to launch similar products on their own, hence the defense.
The day after the complaint, Walters publicly stated on Discord that the code of Eliza Labs will continue to be open for use, will not change its vision, and will not leave, using #freeEliza as a rallying call. Currently, both X and Walter have not responded to media comments, and the subsequent direction of the case remains to be observed.
) Note: Section 230 of the Communications Decency Act in the United States refers to intermediaries such as social media platforms, forums, and search engines, stating that they are generally not legally responsible for the content published by users on their platforms. (
)OpenAI countersues Musk for long-term harassment, US court: Hearing scheduled for March next year(
This article: Musk's X sued by Eliza Labs: Cooperation turns into extortion, suspension for refusing to pay a $600,000 licensing fee. First appeared in Chain News ABMedia.