Internal documents from early 2018 reveal that Elon Musk, prior to his departure from OpenAI, championed a groundbreaking plan to fund the artificial intelligence research lab through a $10 billion Initial Coin Offering (ICO). This stunning proposal, reported by CoinDesk in January 2025, represents a pivotal moment where the development of transformative AI nearly intersected with blockchain-based fundraising at an unprecedented scale.
The proposal, conceived during the peak of the 2017-2018 cryptocurrency frenzy, involved creating a token that would grant holders access to future AI services or computing resources. The targeted $10 billion would have dwarfed most traditional venture capital rounds of the time and potentially distributed tokens to thousands of global investors. This model mirrored contemporary utility-token projects, offering access rather than equity.
The historical context is critical. The period witnessed massive ICOs, with projects like EOS raising $4.1 billion and Telegram securing $1.7 billion. Regulatory frameworks were ambiguous, creating a window for such innovative fundraising. OpenAI itself faced immense computational costs for training advanced models, estimated at millions of dollars per month for cloud infrastructure.
However, Musk's support was short-lived. He withdrew his backing within weeks and subsequently resigned from the OpenAI board in February 2018. Multiple factors likely influenced this rapid reversal: intensifying regulatory scrutiny from the SEC, which began classifying certain tokens as securities; Musk's need to focus on Tesla's challenges, including Model 3 production and Autopilot development; and his growing concerns about AI safety and commercialization timelines.
OpenAI ultimately pursued a different path, transitioning to a "capped-profit" structure and securing a $1 billion investment from Microsoft in 2019, alongside funding from venture firms like Khosla Ventures. This traditional funding strategy contrasts sharply with the decentralized, token-based model of the proposed ICO.
Expert analysis highlights the proposal's timing at a crossroads for crypto. "The first quarter of 2018 saw both record fundraising and mounting SEC warnings," explained Dr. Sarah Chen, a cryptocurrency historian at Stanford University. The period was marked by regulatory shifts following the SEC's DAO Report, a major market correction, scalability issues, and a proliferation of scams that damaged the ICO mechanism's reputation.
The revelation gains new relevance in the modern context of AI and blockchain convergence. Projects like Bittensor and SingularityNET now employ token-based models for coordinating distributed computation, facing similar questions about governance and regulation that the 2018 OpenAI proposal encountered, albeit with clearer frameworks and more mature technology today.
This historical footnote underscores how financing choices can redirect technological trajectories. The abandoned $10 billion ICO plan highlights a critical alternative path for funding transformative AI, one that prioritized broad, token-based community participation over traditional, concentrated venture capital.
