“Elon Musk Exposed: Why He Stopped OpenAI’s Controversial Crypto Plan”

Elon Musk Blocked OpenAI’s ICO Plan in 2018 Over Credibility Concerns

In a dramatic turn of events revealed in court filings, Elon Musk, co-founder of OpenAI and CEO of Tesla, reportedly quashed a proposal from OpenAI CEO Sam Altman in 2018 to launch a cryptocurrency token through an initial coin offering (ICO). Musk warned that such a move could irreparably damage OpenAI’s credibility.

Musk’s Firm Stance Against OpenAI’s ICO Proposal

According to court documents filed on November 14 in the United States District Court for the Northern District of California, Musk’s legal team described the ICO plan as “scam worthy” and potentially catastrophic for OpenAI’s reputation.

> “In January 2018, mere months after their September 2017 ‘enthusias[m],’ Altman proposed a scamworthy ‘ICO,’ or initial coin offering, that would have seen OpenAI, Inc. sell its own cryptocurrency,” Musk’s lawyers stated.

Musk was unequivocal in his rejection. As per the filing:

> “It would simply result in a massive loss of credibility for OpenAI and everyone associated with the ICO.”

This revelation sheds light on the tensions within OpenAI during its formative years, particularly regarding its strategic direction and financial model.

A Timeline of Disputes

From Nonprofit to For-Profit: The Catalyst

The ICO proposal came just months after a contentious discussion about transforming OpenAI from a nonprofit into a for-profit entity. According to the court filing, in September 2017, Altman and OpenAI’s current president, Greg Brockman, had already pitched the idea of a for-profit structure. Musk, however, pushed back firmly.

> “Either go do something on your own or continue with OpenAI as a nonprofit,” Musk reportedly told Altman and Brockman.

Musk even issued an ultimatum, emphasizing his frustration:

> “I will no longer fund OpenAI until you have made a firm commitment to stay [a nonprofit], or I’m just being a fool who is essentially providing free funding for a start-up.”

Musk’s Lawsuit Against OpenAI

This ICO controversy has resurfaced as part of Musk’s broader legal dispute with OpenAI. In February 2024, Musk sued the organization, alleging that it violated its original nonprofit commitments. Although Musk briefly appeared to drop the case in June, he revived it on August 5.

The court filing also alleges that after Musk rejected the ICO plan, Altman and Brockman began planning their transition to a for-profit model, potentially undermining OpenAI’s original mission.

A Broader Legal Landscape

Interestingly, these revelations coincided with a separate legal development for Musk. On the same day as the OpenAI court filing, a class-action lawsuit accusing Musk and Tesla of manipulating Dogecoin’s price was withdrawn.

The 2022 lawsuit had claimed Musk used social media to influence Dogecoin prices, benefiting his holdings. However, on November 14, plaintiffs voluntarily dropped their case and pledged not to seek further post-judgment relief.

What This Means for OpenAI and Musk

Musk’s rejection of the ICO underscores his commitment to maintaining OpenAI’s integrity—at least in its early days. However, as OpenAI has since evolved into a capped-profit company, questions linger about how much the organization has deviated from its founding principles.

For Musk, this saga highlights his complicated relationship with the companies he co-founds. As OpenAI’s trajectory diverges from Musk’s vision, the legal battle may serve as a pivotal moment in the AI industry’s history.

While the details unfold, the case underscores a deeper philosophical clash: the balance between profit motives and the pursuit of groundbreaking, altruistic innovation.