Musk Rejects Proposal for OpenAI Cryptocurrency Token

In early 2018, Elon Musk dismissed a proposal from OpenAI CEO Sam Altman to launch a startup token. He perceived risks to the company’s reputation, according to updated court documents.

“In January 2018, a few months after their ‘enthusiasm’ in September 2017, Altman proposed a fraudulent ‘ICO’ or initial coin offering, whereby OpenAI would sell its own cryptocurrency,” stated the billionaire’s lawyers.

Musk rejected the idea, stating that “it would lead to a massive loss of trust in OpenAI and everyone associated with the ICO.”

According to the lawyers, the proposal came several months after an attempt to persuade Musk to change the firm’s corporate structure from non-profit to for-profit.

“Either do something else, or continue working on OpenAI as a non-profit organization,” the entrepreneur stated at the time.

On August 5, Musk renewed a lawsuit against OpenAI, claiming that the AI startup and its two founders — Altman and Greg Brockman — violated the company’s founding agreement by prioritizing commercial interests over public good.

“I will no longer fund OpenAI unless you make a firm commitment to stay, otherwise I’m just acting like a fool who is essentially providing free funding to a startup,” Musk wrote to Altman and Brockman at the time.

Following this, they “developed a plan to transform into a commercial structure to attract equity capital,” the documents state.

Musk is one of the founders of OpenAI. He left the firm in 2018 after disagreements over its direction. In previous lawsuits, he claimed to have been defrauded of more than $44 million.

The amended document added new defendants: Microsoft, LinkedIn co-founder Reid Hoffman, and former OpenAI board member and Microsoft vice president Di Templeton.

The lawsuit claims that OpenAI “actively seeks to eliminate competitors” like xAI, “securing promises from investors not to fund them.”

Earlier, media reported that OpenAI is in early-stage talks with the California Attorney General’s office regarding the transformation of its corporate structure into a commercial business.

In October, the startup raised $6.6 billion at a valuation of $157 billion. The high valuation depended on its ability to change its corporate structure and lift profit restrictions for investors.