Covenant AI announced its departure from the Bittensor decentralized AI network, alleging its governance structure undermines decentralization claims. Founder Sam Dare stated the team could no longer build on or raise for Bittensor due to a lack of meaningfully distributed governance, calling it "decentralization theatre." Dare accused founder Jacob Steeves of maintaining effective control and unilaterally deploying changes.
Covenant AI also claims Steeves suspended subnet emissions and restricted community moderation. Steeves denied these allegations, stating he cannot suspend emissions and holds no special privileges beyond other TAO holders. He explained token sales were for "alpha holdings" on underperforming subnets, a standard market action.
The dispute comes after Nvidia CEO Jensen Huang previously praised Bittensor's decentralized training capabilities. The Bittensor (TAO) token dropped approximately 18% following Covenant AI's announcement, with sell volume reaching its highest level since December 2024.