Elon Musk blocked OpenAI’s ICO idea because ‘crypto damages credibility’

Elon Musk killed OpenAI’s plan to launch an initial coin offering (ICO) in 2018. The billionaire said it would destroy the company’s reputation, according to court filings submitted on Nov. 14.

Elon’s decision blocked co-founders Sam Altman and Greg Brockman, who wanted to sell tokens to raise funds for the nonprofit AI startup. “It would simply result in a massive loss of credibility for OpenAI and everyone associated with the ICO,” he said in the filing.

The revelation exposes deeper tensions between Elon and OpenAI, a company he helped co-found in 2015. At its start, OpenAI was supposed to create artificial general intelligence (AGI) that would benefit humanity without compromising safety.

Elon was all in, investing $44 million and joining as co-chair of the board. But by 2018, the cracks were already showing. Disagreements over strategy, funding, and control would soon push Elon out and set OpenAI on a different path.

Elon’s rejection of crypto

In early 2018, OpenAI was strapped for cash. Altman and Brockman pitched the idea of launching a token to generate revenue. ICOs were booming then, with companies raising billions through token sales. OpenAI saw an opportunity, but Elon wasn’t having it.

He thought attaching OpenAI’s name to a token would damage its credibility. The billionaire, well-known for his skepticism about crypto, believed that associating with a trend often linked to scams and speculation was a terrible idea.

The court filings also show Elon suggested merging OpenAI with Tesla to address its financial struggles. His vision was to align OpenAI’s AI research with Tesla’s work on self-driving cars. But the board didn’t bite. 

By February 2018, Elon resigned from OpenAI’s board. He also withdrew a significant planned donation to the organization, further widening the gap between him and his former colleagues.

OpenAI’s pivot after Elon’s exit

After Elon walked out, OpenAI underwent a transformation. The nonprofit started as a research lab promising to prioritize humanity’s welfare over profits. But by 2019, OpenAI introduced a “capped-profit” subsidiary. The decision allowed it to accept $1 billion in funding from Microsoft, which became a strategic partner.

Elon didn’t hide his disapproval. He accused OpenAI of betraying its mission. “OpenAI has become a closed-source, maximum-profit company effectively controlled by Microsoft,” the eccentric billionaire said in a series of public statements. For someone who had invested heavily in the organization’s original vision, this shift was a betrayal.

On the flip side, Altman defended the decision, saying OpenAI needed the funding to stay competitive against tech giants like Google and Amazon. He claimed the partnership with Microsoft didn’t compromise the company’s goals but strengthened them. The disagreement set the stage for a public feud that’s still ongoing.

Legal drama and public feuds

By 2024, things between Elon and OpenAI had gone from bad to worse. Elon filed a lawsuit against the organization, accusing it of misleading him about its mission and governance. The legal battle brought up old tensions, including Elon’s earlier proposal to take over OpenAI entirely.

OpenAI responded to the lawsuit with sharp words. “We’re sad that it’s come to this with someone whom we’ve deeply admired,” the company said in a public statement. It accused Elon of undermining their efforts while simultaneously launching his own AI firm, xAI, which he announced in 2023.

Elon also hasn’t stayed quiet about his concerns over artificial general intelligence. He has repeatedly warned about the dangers of uncontrolled AI development, calling it one of humanity’s biggest existential threats. These fears were part of why he co-founded OpenAI in the first place.

xAI, Elon’s AI venture, is his latest attempt to shape the future of AI. He claims the company will focus on “truth-seeking” AI models, a direct contrast to OpenAI’s partnerships with corporate giants.