Elon Musk’s social media company X has filed a lawsuit against liberal advocacy group Media Matters for America, saying it manufactured a report to show advertisers’ posts alongside neo-Nazi and white nationalist posts in order to “drive advertisers from the platform and destroy X Corp.”

Media Matters, a Washington DC-based non-profit media watchdog, called the lawsuit “frivolous.”

Advertisers have left the site formerly known as Twitter over concerns about their ads show up next to pro-Nazi content and hate speech.

IBM, NBCUniversal and their parent company Comcast said last week they stopped advertising on X after the Media Matters report said their ads were appearing alongside material praising Nazis.

The Media Matters report pointed to ads from Apple and Oracle placed next to antisemitic material on X. On Friday, it said it also found ads from Amazon, NBA Mexico, NBCUniversal and others next to white nationalist hashtags.

But X’s complaint, filed in federal court in Fort Worth, Texas, said Media Matters “knowingly and maliciously” portrayed ads next to hateful material “as if they were what typical X users experience on the platform”.

The complaint claims Media Matters manipulated algorithms on the platform to create images of advertisers’ paid posts next to racist, incendiary content.

The juxtapositions, according to the complaint, were “manufactured, inorganic and extraordinarily rare”.

It says Media Matters did this by using X accounts that just followed users known to produce “extreme fringe content” and accounts owned by X’s major advertisers. This, the complaint says, led to a feed aimed at producing side-by-side placements that Media Matters could then screen shot in an effort to alienate X’s advertisers.

Media Matters said on Monday that it stands by its reporting and expects to prevail in court.

“This is a frivolous lawsuit meant to bully X’s critics into silence,” the organisation’s president Angelo Carusone said in a prepared statement.