Elon Musk vs. OpenAI – The ICO Credibility Conundrum

Elon Musk, the billionaire CEO of Tesla and co-founder of OpenAI, reportedly dismissed a proposal by OpenAI CEO Sam Altman to launch a cryptocurrency token in early 2018, warning it could tarnish the company’s reputation.

According to a recent filing in the United States District Court for the Northern District of California, Musk rejected the idea of an Initial Coin Offering (ICO), calling it a potential “scamworthy” move.

Musk was Concerned About ICO’s Harm to Credibility

The court document, filed on November 14, reveals Musk’s concerns about the damage such a move could cause to OpenAI’s credibility.

“Musk shot down this idea, stating it would result in a massive loss of credibility for OpenAI and everyone associated with the ICO,” the filing reads.

This proposal from Altman came just months after discussions about transitioning OpenAI from its original nonprofit model to a for-profit entity.

Musk’s legal team noted that in September 2017, Altman and Greg Brockman, OpenAI’s current president, initially pitched the for-profit idea, which Musk opposed.

He reportedly warned them to either proceed as a nonprofit or pursue separate ventures.

In a statement to Altman and Brockman, Musk wrote, “I will no longer fund OpenAI until you have made a firm commitment to stay or I’m just being a fool who is essentially providing free funding for a start-up.”

The legal dispute between Musk and OpenAI escalated earlier this year.

In February, Musk sued the organization for allegedly breaking its promise to remain a nonprofit.

Although the case appeared to be dropped in June, Musk resumed legal action in August, further accusing Altman and Brockman of pursuing personal financial gains at the expense of OpenAI’s mission.

The court filing also alleges that after Musk rejected the ICO proposal, Altman and Brockman began devising a plan to transition OpenAI to a for-profit model to secure funding.

Musk’s lawyers described this as another “get-rich-quick scheme” by the two leaders.

On the same day the allegations were submitted, a separate legal matter involving Musk was resolved.

Plaintiffs in a 2022 class-action lawsuit accusing Musk of manipulating Dogecoin prices dropped their appeal.

According to reports, the plaintiffs agreed not to pursue further legal actions against Musk or Tesla.

Dogecoin Hits New Highs

While the legal battle fades, Dogecoin remains a central element of Musk’s public persona.

The meme coin’s price surged this week, climbing over 83% to $0.36, fueled by recent political and economic developments.

Musk’s connection to Dogecoin has reached new heights with his appointment to co-lead the proposed Department of Government Efficiency (D.O.G.E.), part of President-elect Donald Trump’s administration.

The initiative, seen as a nod to Dogecoin’s playful acronym, has thrust the cryptocurrency into mainstream political discourse.

The newly formed DOGE will offer external advice and guidance to the U.S. government while collaborating with the White House and Office of Management and Budget.

Its mission includes implementing structural reforms and fostering an entrepreneurial approach to government operations.

One of DOGE’s key tasks is addressing inefficiencies in the federal government’s $6.5 trillion annual spending.