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Covenant AI, the developer of a decentralized artificial intelligence subnet, said Friday it is leaving the Bittensor network, accusing Bittensor of operating with concentrated governance that undermines its decentralization claims.
In a post on X, Covenant AI founder Sam Dare said the team could no longer build on or raise for Bittensor because its governance was not meaningfully distributed.
“It is decentralization theatre,” Dare said. “Jacob Steeves maintains effective control over the triumvirate, resists any meaningful transfer of authority, and deploys changes unilaterally whenever he chooses, without process and without consensus.”
The dispute centers on Bittensor’s decentralization pitch. Covenant AI alleged that founder Jacob Steeves, known as Const, exerts outsized influence over governance and network operations. Steeves denied the accusation.
Bittensor’s governance documents describe a transitional system in which a “Triumvirate” of Opentensor Foundation employees holds root permissions alongside a senate, rather than a fully open governance model.
Covenant AI said Steeves took several actions against the project in recent weeks, including suspending emissions to its subnet, restricting moderation powers in community channels, and applying “direct economic pressure” through visible token sales during the dispute.
Steeves rejected the allegations. He said he cannot suspend subnet emissions and that he does not hold “any privilege beyond what normal TAO holders have.”
In an X response, Steeves said he sold some of his “alpha holdings on his three subnets” because they were not running and were on near 100% burn code, adding that this changed emissions in the same way “all buys and sells on Bittensor do.”
Steeves also denied stripping Covenant AI of moderation rights, saying he temporarily removed the team’s ability to delete posts before restoring it. He added that large token sales would have been visible onchain.
“Less than 1% of what i had invested in his teams. Visibility is impossible to avoid in my position. I reserve my right to buy and sell tokens which is what underpins the entire system of dTao,” he said.
Bittensor previously drew mainstream attention after Nvidia CEO Jensen Huang praised the decentralized training run on Bittensor Subnet 3. Huang called Covenant’s milestone of pre-training the largest decentralized LLM a “remarkable technical achievement” during the All-In Podcast on March 19.
The governance dispute also weighed on Bittensor’s TAO token. As of Friday morning, TAO was down around 18% over the previous 24 hours, according to market data.
Cointelegraph reported that sell volume on TAO rose to its highest level since December 2024, about 24 hours before Covenant AI announced its departure. Crypto analyst Ardi said in an X post that the timing was not coincidental.
“If you think that’s a coincidence, you don’t understand the game you’re playing. This was a calculated exit and execution,” Ardi wrote.
Cointelegraph reached out to Covenant AI and Bittensor for comment but had not received a response by publication.
The dispute also raised wider concerns for projects seeking decentralization, according to David and Daniil Liberman, co-creators of the decentralized layer-1 blockchain Gonka protocol.
“Decentralized networks that want serious builders have to answer one question: can the infrastructure you build on be used against you? If the answer is yes, the decentralization is cosmetic,” they told Cointelegraph.
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