- Xai Foundation filed a lawsuit against Elon Musk’s xAI in federal court in California, claiming trademark infringement and unfair competition.
- The gaming network says it has been using the name “Xai” since June 2023, but Musk announced his xAI a month later.
- The U.S. Patent Office (USPTO) has already suspended various Musk’s trademark applications due to “likelihood of confusion.”
- Xai is seeking to stop xAI’s use of the name in gaming and blockchain, demanding damages for reputational harm.
Table of Contents
When Xai Met xAI: A Collision of Crypto and AI
The Xai Foundation, the developers of an Ethereum layer-3 gaming platform, have filed a lawsuit against Elon Musk’s artificial intelligence (AI) company, xAI, claiming trademark infringement, resulting in “confusion in the marketplace at large.”
Court filings cited that Xai has used its name since June 2023 and omphalos gamified its $XAI token and gaming project over two months before Musk unveiled his AI project in July 2023.
Tensions between the companies flared when Musk announced xAI’s entry into game development in November 2024. Immediately after, crypto traders and media began to merge the companies. Users on Binance speculated about “Elon’s Xai token“, news sites used Xai’s logo in their xAI reports, and even Musk’s Grok chatbot falsely reported that Xai was part of his “empire“.
More Than Just a Name: Reputational Risks and Legal Threats
Xai is suffering more than an annoyance; they are suffering consequences. The lawsuit highlights “notable negative consumer sentiment” due to Musk’s polarizing reputation and controversies from xAI (including Grok producing antisemitic content). To add more fuel, Musk’s lawyers allegedly threatened to withdraw Xai’s trademark if they didn’t let the xAI use the mark.
The U.S. Patent Office (USPTO) is already siding with Xai, and has suspended multiple applications by xAI for the same reason and nature, including identifying current trademark for xAI. Now, Xai is pursuing a court order for a permanent block on xAI from making any use of the xAI name for all uses related to gaming and blockchain, a business area Musk is pursuing more and more.
Why This Is Important for Crypto Innovation
This case addresses whether smaller projects can defend their brand against bigger tech companies. As AI and blockchain technology continue to merge, naming collisions will continue to grow. So far, Xai’s legal action illustrates a harsh truth: in the attention economy, even completely unrelated projects can be displaced by billionaire-sponsored projects.
Final Thought: Xai’s struggle is not just for a name, but for its independent existence beyond Musk’s shadow. Trademark law doesn’t care how rich you are.
FAQs
Can Xai actually win against Musk?
Yes, trademark law prioritizes first use, not deeper pockets. Xai’s early adoption strengthens its case.
What does Xai want?
A ban on xAI using the name in gaming and blockchain, plus damages for brand dilution.
Could they settle?
Possibly, Musk might rebrand gaming efforts or license the name, but Xai claims it’s not for sale.
For more Musk-related lawsuits, read: Elon Musk’s xAI Faces Lawsuit Over Alleged Clean Air Act Violations
