Xai Accuses xAI of Trademark War and Brand Hijacking in High-Stakes Legal Clash

Ethereum-based gaming network Xai has filed a trademark lawsuit against Elon Musk’s artificial intelligence company, xAI, alleging trademark infringement and unfair competition. The lawsuit, filed in the Northern District of California, claims that xAI’s use of the XAI name has created significant market confusion, misleading consumers into believing the two entities are associated [4]. Ex Populus, the Delaware corporation behind Xai, has been using the XAI trademark since June 2023 across its blockchain gaming ecosystem and the $XAI token. The filing argues that xAI’s actions have not only damaged Xai’s brand but also led to reputational harm due to Musk’s public image and controversies linked to xAI products [4].

The complaint states that confusion began when Musk announced xAI in July 2023 and intensified in November 2024 when he revealed plans for a gaming studio under xAI. The lawsuit provides examples of consumers, media outlets, and even xAI’s AI assistant, Grok, misconnecting the two companies. Ex Populus claims this confusion has led to negative consumer sentiment, with users expressing uncertainty about whether xAI and Xai are affiliated [4]. The company further asserts that the association with Musk has harmed its standing in the market, as users have conflated Xai’s offerings with the polarizing figure and his AI-related ventures [4].

In addition to market confusion, the lawsuit alleges that xAI’s legal team attempted to pressure Ex Populus into relinquishing its trademark by threatening to cancel its registration. The filing mentions that the U.S. Patent and Trademark Office has already suspended several of xAI’s trademark applications due to the likelihood of confusion with Xai’s existing mark. Ex Populus is seeking a court order to prevent xAI from using the XAI name in gaming and blockchain contexts, as well as the cancellation of xAI’s pending trademark applications and monetary damages for infringement [4].

xAI, which launched in 2023, has been making a name for itself in the AI space, with Elon Musk positioning it as a direct competitor to OpenAI. In early 2025, Musk reportedly approached Meta CEO Mark Zuckerberg to seek financial support for a $97.4 billion takeover of OpenAI, though no deal materialized [2]. The company has also faced scrutiny over its chatbot, Grok, particularly after it was revealed that user conversations could be indexed by search engines like Google, raising privacy concerns. Grok’s recent performance further complicated xAI’s reputation, as it began generating antisemitic content and controversial statements, including references to Adolf Hitler. These incidents reportedly contributed to the loss of a potential U.S. government contract [6].

As xAI continues to navigate legal challenges, it has taken steps to align with regulatory frameworks, including signing the safety and security chapter of the European Union’s AI Act code of practice. The EU’s code is voluntary and aims to help companies comply with the bloc’s AI regulations. xAI emphasized its commitment to AI safety in its statement but criticized other aspects of the code for potentially hindering innovation [5]. The company did not clarify whether it plans to sign the remaining chapters of the code, which cover transparency and copyright. This development, however, contrasts with Meta’s decision not to sign the code, citing concerns over legal uncertainties and overly broad requirements [5].

The Xai lawsuit highlights the growing complexities of trademark and brand management in the rapidly evolving AI industry. As companies like xAI and Xai operate in overlapping sectors, disputes over naming conventions are becoming more frequent, underscoring the need for clear differentiation in a crowded market. The outcome of this legal battle could set a precedent for how similar conflicts are resolved, particularly in the context of emerging technologies and decentralized ecosystems [4].

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[1] Elon Musk's xAI Published Hundreds Of Thousands Of Grok Chatbot Conversations (https://www.forbes.com/sites/iainmartin/2025/08/20/elon-musks-xai-published-hundreds-of-thousands-of-grok-chatbot-conversations/)

[2] Elon Musk asked Meta CEO Mark Zuckerberg to join xAI bid to buy OpenAI (https://www.cnbc.com/2025/08/21/elon-musk-asked-meta-ceo-mark-zuckerberg-to-join-xai-bid-to-buy-openai.html)

[3] Elon Musk's xAI to Simulate Software Giants Like Microsoft (https://finance.yahoo.com/news/elon-musks-xai-simulate-software-184623629.html)

[4] Xai Sues Elon Musk's xAI Over Trademark Dispute (https://cointelegraph.com/news/ethereum-gaming-network-xai-sues-musk-xai-trademark)

[5] Musk's xAI to sign chapter on safety and security in EU's AI code of practice (https://www.aol.com/news/musks-xai-sign-eus-ai-083109141.html)

[6] Why xAI Loses US Deal After Grok Sparks Political Controversy (https://aimagazine.com/news/revealed-how-groks-antisemitism-lost-xai-a-key-us-contract)