Ethereum gaming network Xai claims Elon Musk’s AI firm xAI has caused market confusion and reputational harm.
Ethereum-based gaming network Xai has filed a lawsuit against Elon Musk’s artificial intelligence company xAI, accusing it of trademark infringement and unfair competition.
The complaint, lodged in the Northern District of California on Thursday, claims Musk’s xAI company has created widespread market confusion, damaging Xai’s brand.
Ex Populus, the Delaware corporation behind Xai, said it has used 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 requires the Court’s intervention to remedy,” the filing said.
Ex Populus operates the Xai ecosystem, which includes a blockchain-powered network designed for video gaming and digital transactions, offering infrastructure to support game logic, AI-driven decisions, rewards and data management across multiple applications, per the filing.
The US Treasury is exploring whether identity checks should be built directly into decentralized finance (DeFi) smart contracts, a move critics warn could rewrite the very foundations of permissionless finance.
Last week, the agency opened a consultation under the Guiding and Establishing National Innovation for US Stablecoins Act (GENIUS Act), which was signed into law in July. The Act directs the Treasury to evaluate new compliance tools to fight illicit finance in crypto markets.
One idea was embedding identity credentials directly into smart contracts. In practice, this would mean a DeFi protocol could automatically verify a user’s government ID, biometric credential, or digital wallet certificate before allowing a transaction to proceed.
Supporters argue that building Know Your Customer (KYC) and Anti-Money Laundering (AML) checks into blockchain infrastructure could streamline compliance and keep criminals out of DeFi.
xAI gaming studio triggers further confusion
The complaint alleges that confusion began after Musk announced his company, xAI, in July 2023 and deepened when he said in November 2024 that xAI planned to launch a gaming studio.
The filing states 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 cited examples of consumers, publications and even Musk’s AI assistant Grok incorrectly linking the two ventures.
Ex Populus argued that the reputational harm goes beyond lost goodwill. The complaint says Xai has faced “significant negative consumer sentiment” due to Musk’s polarizing public image and controversies involving xAI products.
“Plaintiff is not only being irreparably harmed by the loss of control over its hard-earned goodwill in its XAI Trademark… but also Plaintiff is damaged because the confusing association with Elon Musk is resulting in significant negative consumer sentiment,” the filing notes.
Musk’s team pressured Xai over trademark rights
The filing accuses Musk’s legal team of trying to pressure Ex Populus into relinquishing rights by threatening cancellation of its registration earlier this month.
The lawsuit also mentioned that the US Patent and Trademark Office has already suspended several of Musk’s xAI trademark applications due to a likelihood of confusion with Xai’s existing mark.
Ex Populus is seeking cancellation of xAI’s pending applications, damages for infringement, and a court order to prevent Musk’s company from using the disputed name in gaming and blockchain contexts. “There is no remedy at law for the sheer magnitude of harm Defendants have caused,” the company told the court.
Source: https://cointelegraph.com/tags/blockchain
