The Ethereum-based gaming network Xai has initiated a lawsuit against Elon Musk’s artificial intelligence firm xAI, alleging trademark infringement and unfair competition.
The legal complaint, filed in the Northern District of California on Thursday, claims that Musk’s xAI has caused significant market confusion, adversely affecting Xai’s brand.
Ex Populus, the Delaware corporation that operates Xai, stated it has utilized the XAI trademark in US commerce since June 2023, including through its blockchain gaming ecosystem and the $XAI token. “This is a classic case of trademark infringement that necessitates the Court’s intervention,” the filing asserts.
Ex Populus oversees the Xai ecosystem, a blockchain-powered network built for video gaming and digital transactions, providing the infrastructure for game logic, AI-driven decisions, rewards, and data management across various applications, according to the filing.
Xai sues Musk’s xAI. Source: XAI
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xAI gaming studio causes increased confusion
The lawsuit claims that confusion started after Musk announced xAI in July 2023 and intensified when he revealed plans for a gaming studio in November 2024.
The filing indicates that “marketplace confusion abounded as to whether Defendants/Musk were associated with, owned, or sponsored Plaintiff’s XAI Trademark or the associated goods and services.” It highlighted instances of consumers, media outlets, and even Musk’s AI assistant Grok incorrectly linking the two entities.
Ex Populus argued that the reputational damage extends beyond lost goodwill. The complaint states that Xai has encountered “significant negative consumer sentiment” stemming from Musk’s contentious public persona and controversies surrounding xAI products.
“Plaintiff is not only facing irreparable harm due to the loss of control over its hard-earned goodwill in its XAI Trademark… but also Plaintiff is harmed as the misleading association with Elon Musk has led to substantial negative consumer sentiment,” the filing emphasizes.
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Musk’s team pressured Xai regarding trademark rights
The lawsuit alleges that Musk’s legal team attempted to coerce Ex Populus into relinquishing its rights by threatening to cancel its trademark registration earlier this month.
The filing also noted that the US Patent and Trademark Office has suspended several of Musk’s xAI trademark applications due to potential confusion with Xai’s established mark.
Ex Populus is seeking the cancellation of xAI’s pending applications, damages for infringement, and a court injunction to prevent Musk’s company from using the contested name in gaming and blockchain settings. “No legal remedy exists for the extensive harm caused by the Defendants,” the company stated in court.
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