How much money did Elon Musk plan to invest in OpenAI? The secret ICO negotiations for $10 billion

Internal recently declassified documents reveal one of the lesser-known chapters in Elon Musk’s financial history in the tech sector. In 2018, Musk seriously considered channeling approximately $10 billion into OpenAI through an initial coin offering (ICO), a funding mechanism that was trending at the time. However, his initial support for this strategy was fleeting. Transcripts of conversations between Musk and OpenAI founders show a dramatic shift in negotiations that eventually shaped the organization’s future.

The ambitious funding plan that almost materialized

In early 2018, Musk actively supported OpenAI conducting a token initial offering to raise the mentioned $10 billion. Internal notes reveal that the entrepreneur and other founders extensively debated the mechanics of creating a profit-oriented, token-based branch, specifically designed to fund the organization’s original non-profit mission.

This plan represented a significant gamble of Musk’s personal wealth in artificial intelligence research, combined with his vision of cryptocurrencies as a fundraising tool. According to the documents, Musk had reached a preliminary agreement on the general terms of the tokenized structure, a decision that would have radically transformed the funding landscape for AI companies at that time.

The retraction that changed everything

Contrary to expectations, by the end of January 2018, OpenAI founders announced that Musk no longer supported the approach. According to OpenAI’s statement in response to Musk’s legal complaint, the entrepreneur concluded that the organization would not be able to raise the target amount through this mechanism and decided to redirect his money and attention toward AI initiatives within Tesla.

This change of stance was decisive. Musk’s decision to abandon both the ICO plan and his involvement in OpenAI at the end of 2018 had profound consequences for how the organization structured its business model in subsequent years. Instead of becoming a traditional startup backed by tokenized venture capital, OpenAI adopted a unique hybrid structure: a public benefit corporation controlled by a non-profit organization, a model maintained to this day.

The historical context: Why 2017-2018 was the golden era of ICOs

To understand why Musk and OpenAI leaders seriously considered this plan, it is necessary to grasp the speculative fervor that characterized the cryptocurrency market in 2017 and 2018. During that period, token initial offerings became a virtually ubiquitous funding mechanism. Startups raised billions by selling tokens directly to retail investors, all under a regulatory framework that had not yet been formally established.

Investors’ appetite was insatiable in those years. Token sales were presented as a revolutionary alternative to traditional venture capital, promoting speed, decentralization, and democratization in business financing. However, this enthusiasm was fleeting. Increased regulatory scrutiny and extreme market volatility in 2018 dramatically slowed the popularity of this fundraising model.

How this story reflects the early evolution of the crypto sector

OpenAI’s internal discussions about the ICO offer a fascinating window into how conventional tech figures, including entrepreneurs of Musk’s caliber, seriously contemplated integrating cryptocurrencies and blockchain into large-scale institutional projects. Even a relatively skeptical figure like Musk considering a $10 billion ICO underscores how pervasive this narrative was at the time.

Musk’s departure from OpenAI left the organization free to develop its own financial trajectory. Unlike many AI startups that sought massive venture capital, OpenAI developed a unique governance model that allowed it to maintain editorial independence and a long-term mission—characteristics that ultimately contributed to its current position as an undisputed leader in generative AI.

Contemporary cases: How the token market evolved

Unlike OpenAI and Musk’s cautious approach toward tokens in 2018, other projects persisted with blockchain-based funding models. For example, Pudgy Penguins emerged as one of the most robust NFT brands in the current cycle, expanding its ecosystem beyond “digital luxury goods” into a multidimensional intellectual property platform. Its strategy includes physical toys (with retail sales exceeding $13 million and over 1 million units sold), games that surpassed 500,000 downloads in just two weeks, and the PENGU token distributed to over 6 million addresses.

In the traditional digital asset market, XRP has shown interesting patterns. Although it fell about 4 percent during the current month, on-chain data points to a strengthening of underlying investor interest. XRP exchange-traded funds (ETFs) listed in the US attracted net inflows of $91.72 million this month, challenging the trend of sustained outflows from Bitcoin ETFs.

The legacy of a decision not taken

Elon Musk’s story and the ICO that never was highlight how pivotal business decisions can be during times of regulatory uncertainty. Musk’s retreat was not merely a personal change of opinion; it was an event that redefined OpenAI’s trajectory and potentially how the world perceives the relationship between cryptocurrencies and AI.

Today, as the regulatory landscape has clarified and the industry has matured, revisiting these negotiations from 2018 offers lessons on prudence, adaptability, and how major tech figures navigated a period of speculative fever. The money Musk considered investing in OpenAI was eventually channeled into other projects, but the legacy of these negotiations remains embedded in the unique governance structure that OpenAI maintains today.