In 2018, Elon Musk blocked the proposal from the AI chatbot OpenAI to launch an ICO, stating that it would compromise the company’s credibility. The incident emerges from a recent legal filing, revealing tensions between Musk and Sam Altman.
Let’s see all the details in this article.
Elon Musk stops the proposal of a crypto token to protect the reputation of OpenAI
A recent legal filing has revealed details about one of the most heated disputes between Elon Musk and Sam Altman, co-founders of OpenAI.
In 2018, Altman proposed an initial coin offering (ICO) to raise funds for the company, an idea that Musk categorically rejected for credibility reasons.
According to the document submitted to the United States District Court for the Northern District of California, Elon Musk declared that proceeding with an ICO would have been damaging to the reputation of OpenAI and to anyone involved.
The episode dates back to January 2018, a few months after OpenAI had started exploring idee innovative to raise funds.
Altman, together with the current president Greg Brockman, had put forward the proposal to launch a cryptocurrency to capitalize on the growing interest in the blockchain sector.
However, Musk’s lawyers emphasized that the tech magnate immediately criticized the idea, calling it an “ICO scam” that would undermine the reliability of OpenAI.
The proposal of an initial coin offering was just the latest in a series of attempts to transform OpenAI from a non-profit organization to a for-profit structure.
According to the lawyers, these plans have contributed to exacerbating the tensions between Musk and the other executives of OpenAI. In September 2017, Altman and Brockman had already suggested a transition to a for-profit model, an idea that Musk had strongly rejected.
Musk clearly stated:
“Go ahead on your own or continue with OpenAI as a non-profit organization”.
This ultimatum reflected his concern for the original mission of OpenAI. Which had been conceived to ensure that advanced artificial intelligence was developed and distributed for the benefit of humanity, without predominant economic interests.
The cause of Musk against OpenAI and Altman
In an attempt to protect the original vision of OpenAI, Musk also refused to continue funding the organization without a clear commitment to remain non-profit:
“I will no longer fund OpenAI until you have made a firm commitment to stay,”
This is what Musk wrote to Altman and Brockman, highlighting his frustration at the possibility of being seen as a naive financier of a startup with commercial ambitions.
This firm stance by Musk has put pressure on the other executives, leading to a series of strategic discussions about the future of the organization.
Musk’s lawyers revealed that, a few weeks after Musk’s refusal to support the so-called “ICO truffa,” Altman and Brockman devised a plan to transform OpenAI into a for-profit structure.
The objective was to find a strategy to raise funds through traditional equity investment channels, marking a significant change in the direction of the company.
This transition plan represented a compromise to meet the growing funding needs necessary to support the development of OpenAI’s advanced technologies.
In any case, the legal case is not limited only to the ICO proposal. Musk initiated a lawsuit against OpenAI and Altman in February, accusing the company of violating promises to keep the model non-profit.
Although the case seemed to have been closed in June, Musk renewed it in August, demonstrating his determination to protect the founding principles of OpenAI.
Other legal complications for Musk and his intentions
In the meantime, Musk’s legal context is not without other complications. On November 14, a 2022 class action lawsuit, which claimed that Musk had manipulated the price of Dogecoin through social media, was withdrawn.
The plaintiffs have agreed to drop the lawsuit, waiving any further claims against Musk and Tesla.
This turbulent legal climate has not diverted attention from the broader issues surrounding OpenAI.
The organization has gained extraordinary visibility in recent years, largely thanks to its advancements in creating advanced artificial intelligence models.
However, the controversy over the for-profit structure and the idea of launching a cryptocurrency have raised questions about the future and long-term intentions of OpenAI.
ICOs, which were a popular method for raising capital during the cryptocurrency boom of 2017-2018, have often been criticized for the lack of transparency and for the risk of scams.
Musk, being one of the most influential entrepreneurs in the technology sector, evidently saw this risk as too great a threat for OpenAI, an organization built on trust and innovation.
The decision to reject the idea of the ICO can be seen as an attempt to protect the integrity of the company and ensure that its original mission is not compromised by short-term financial interests.
With the continuous growth of OpenAI and the rapid advancement of AI technologies, it remains to be seen how the internal dynamics and relationships between its founders will evolve.
What is certain is that Musk’s vision and his concerns for ethics and transparency continue to significantly influence the landscape of one of the most influential artificial intelligence developers in the world.