Agentic AI project Eliza Labs sues Elon Musk's xAI

Eliza Labs filed a lawsuit against Elon Musk's xAI alleging monopolistic practices and attempted deplatforming of agentic AI launchpads. The suit claims xAI initially collaborated with Eliza Labs, inviting idea-sharing while Eliza built on xAI's free API. The relationship soured when xAI demanded $50,000 monthly for enterprise licensing or threatened legal action, despite Eliza already paying over $20,000 annually in fees. Eliza alleges xAI extracted technical documentation and usage data to copy their platform before attempting to banish them. The case highlights growing litigation in the AI sector over monopolistic practices and intellectual property rights.