Covenant AI, a subnet developer on the Bittensor decentralized AI network, announced it was leaving the project Friday, citing concentrated governance that, it says, undermines Bittensor’s decentralization claims. Founder Sam Dare said Covenant could no longer build on or fundraise for Bittensor because control was not meaningfully distributed, calling the setup “decentralization theatre.” The team singled out founder Jacob Steeves (known as Const), alleging he exerts outsized influence over the network’s Triumvirate and implements changes unilaterally.
Bittensor’s published governance documents describe a transitional model in which a Triumvirate of Opentensor Foundation employees retains root permissions alongside a senate, rather than an immediately open governance regime. Covenant AI accused Steeves of suspending emissions to its subnet, curtailing moderation powers in community channels, and applying what it called “direct economic pressure” through visible token sales during the dispute.
Steeves denied the primary allegations. He said he lacks the ability to suspend subnet emissions and that his privileges are no greater than those of typical TAO holders. On X, he acknowledged selling some holdings on three subnets that were inactive and running near-100% burn code, noting that buys and sells on Bittensor influence emissions. He also said he only temporarily removed Covenant AI’s ability to delete posts before restoring it, and described his sales as small — under 1% of his total investment in the teams.
The incident underscores a central tension for projects that market themselves as decentralized: whether governance and control over critical infrastructure are genuinely distributed or effectively concentrated. Covenant AI had previously drawn mainstream attention when Nvidia CEO Jensen Huang praised its decentralized training on Bittensor Subnet 3, calling its pre-training of a large decentralized LLM “a remarkable technical achievement.”
The governance fight had market consequences. Bittensor’s TAO token fell roughly 18% over the 24 hours to Friday morning, and sell volume spiked to its highest level since December 2024 about a day before Covenant AI’s public exit. Crypto analyst Ardi suggested on X that the timing pointed to “a calculated exit and execution.” Cointelegraph reached out to Covenant AI and Bittensor for comment but had received no replies by publication.
Observers warn the episode raises broader questions for networks seeking serious builders. David and Daniil Liberman, co-creators of the Gonka protocol, argued that if a network’s infrastructure can be used against builders, its decentralization is merely cosmetic. The dispute highlights practical governance challenges as decentralized AI networks scale and onboard high-profile participants.