Elon Musk and the Fake ICO Adventure: The Crypto Plan That Never Became OpenAI

In a remarkable revelation from recently published internal documents, it has come to light that Elon Musk once enthusiastically approved an ambitious plan whereby OpenAI would raise billions through an initial coin offering. What took place in 2018 offers a fascinating glimpse into the early thinking of tech figures experimenting with blockchain financing at a time when the cryptocurrency industry was exploding.

The Golden Years of Token Issuances: How Everyone Sought Wealth via ICOs

To put the ICO proposal into perspective, you need to go back to 2017 and 2018. This was the period when the crypto world was swept by an unprecedented wave of optimism. Startups with barely a concept could raise billions of dollars simply by selling tokens directly to the public. Regulations were unclear, investors had an insatiable hunger for returns, and no one dared to ask serious critical questions.

This ICO boom temporarily transformed the financing industry completely. Traditional venture capital suddenly appeared cautious and slow. It was a time when even the most conservative companies at least considered how blockchain could transform their organization. For OpenAI, then still a relatively young non-profit organization with ambitious AI goals, a token-based approach seemed an enticing source of funding.

The OpenAI Proposal: When Musk Supported a Billion-Dollar Deal That Never Materialized

Leaked internal conversations reveal that Musk indeed agreed to the proposal in January 2018. The plans were specific: OpenAI would establish a commercial, profit-making arm that would run parallel to the non-profit organization. This profit-generating entity would enable the creation of its own token, which was expected to potentially bring in about $10 billion.

It was an inventive proposal for the time. The founders envisioned a structure where tokens would not only attract capital but also democratize governance and participation in the AI revolution. That Elon Musk approved this proposal underscores how seriously even industry insiders viewed the blockchain-financed future.

The Turning Point: Why the Billion-Dollar Token Adventure Disappeared

However, Musk quickly withdrew his support. By the end of 2018, OpenAI made it clear that Musk’s opinion had changed. His reasons were pragmatic: he concluded that OpenAI would not be able to raise enough resources via an ICO, and moreover, he wanted to focus on artificial intelligence initiatives at Tesla rather than remain involved with OpenAI.

Musk’s departure marked the moment when the ICO financing strategy was completely abandoned. By then, the crypto landscape had already begun to shift. Regulatory authorities became more cautious, market volatility increased, and the idealism of the token revolution gave way to practical realities.

The Long-Term Effects: How One Decision Shaped OpenAI’s Future

Musk’s decision to scrap the ICO adventure had profound consequences. OpenAI would eventually adopt a hybrid structure: a controlling non-profit organization combined with a public benefit corporation. This model, which still forms the backbone of the organization today, proved much more stable and controversially acceptable than any token-based construct could have been.

In that sense, Musk’s renunciation of the plan may have been one of his most influential decisions for OpenAI. A billion-dollar deal via ICO would likely have dragged OpenAI into regulatory quagmires much earlier and possibly even diverted its technological focus.

The Broader Significance: From Crypto Fantasy to Market Maturity

The disclosure of these internal discussions offers more than just historical trivia about OpenAI. It reveals how even the most insightful technical leaders in 2017–2018 wholeheartedly believed in the promise of token financing. The idea that blockchain would help fundamentally change how organizations are funded seemed not only possible but almost inevitable at the time.

Two decades later, we know that it played out differently. ICOs did not disappear entirely, but they lost their dominance as regulations crystallized and investors became more cautious. Still, the memory of this moment remains important. It symbolizes a period when the cryptocurrency community truly believed that a completely new financing paradigm was near.

The proposed $10 billion OpenAI deal was never realized, but its significance—as a measure of how seriously tech and crypto embraced each other—will endure in the history of both industries.