Artificial intelligence developer Eliza Labs has ended its lawsuit accusing Elon Musk’s X Corp. of improperly using its technology insights to launch competing AI products.
A federal judge in Texas dismissed the case Monday after Eliza Labs and X informed the court last week that they had agreed to dismiss the lawsuit with prejudice, meaning the claims cannot be refiled.
An attorney for X said Tuesday that Eliza Labs had purchased an enterprise license from the social media platform and that neither X nor its artificial intelligence affiliate, xAI, paid any money to resolve the dispute. X had denied the allegations.
Eliza Labs said in a statement that the matter had been resolved but declined to provide further details.
The lawsuit, filed in August, alleged that X induced Eliza to share proprietary expertise related to artificial intelligence “agents” that operate on social media platforms and then used that information to develop similar capabilities.
Eliza developed an open-source platform for AI agents designed to act autonomously and adapt over time, distinguishing them from traditional software. The company alleged that X later attempted to restrict its ability to operate on the platform, raising antitrust concerns.
According to the complaint, X contacted Eliza in 2024 to discuss how AI agents could function on the platform. Eliza and its founder said they shared details about the company’s development roadmap and long-term vision during those discussions.
The lawsuit claimed X subsequently told Eliza it would need to pay $50,000 per month for an enterprise license to continue operating on the platform, characterizing the fee as coercive and designed to force developers into paying high prices to avoid removal.
The case is Eliza Labs Inc. et al. v. X Corp., No. 4:25-cv-01208-P, in the U.S. District Court for the Northern District of Texas.
Eliza Labs is represented by Warren Burns of Burns Charest and Matthew Miller of Hanson Bridgett. X is represented by Joel Kurtzberg of Cahill Gordon & Reindel and Noah Schottenstein of Stone Hilton.
