Covenant AI, a subnet developer on the Bittensor decentralized AI network, announced Friday it is leaving the project, accusing Bittensor of operating under a concentrated governance structure that undermines its decentralization claims. Founder Sam Dare said the team could no longer build on or raise for Bittensor because governance was not meaningfully distributed, calling the setup “decentralization theatre” and asserting that founder Jacob Steeves (known as Const) exerts outsized control over the Triumvirate and deploys changes unilaterally.
Bittensor’s governance documents detail a transitional model in which a “Triumvirate” of Opentensor Foundation employees retains root permissions alongside a senate, rather than a fully open governance system. Covenant AI alleged that Steeves had recently suspended emissions to its subnet, restricted moderation powers in community channels, and applied “direct economic pressure” through visible token sales during the dispute.
Steeves denied the main allegations. He said he cannot suspend subnet emissions and that he holds no privileges beyond those of typical TAO holders. In response on X, Steeves said he sold some holdings on his three subnets because they were not running and were on near-100% burn code, noting that buys and sells on Bittensor affect emissions. He also said he only temporarily removed Covenant AI’s ability to delete posts before restoring it and emphasized that large token sales would be visible on-chain, adding that his sales were “not large” — less than 1% of what he had invested in the teams.
The dispute cuts to a central tension in projects that pitch decentralization: whether governance mechanisms and control over critical infrastructure are genuinely distributed or concentrated in practice. Covenant AI previously received mainstream attention after Nvidia CEO Jensen Huang praised its decentralized training on Bittensor Subnet 3, calling the project’s pre-training of the largest decentralized LLM a “remarkable technical achievement” during an interview in March.
The governance conflict also affected market activity. Bittensor’s TAO token fell roughly 18% over the 24 hours to Friday morning, according to market data. Sell volume on TAO surged to its highest level since December 2024 about 24 hours before Covenant AI’s public departure announcement. 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 not received replies by publication.
Observers warn the episode poses broader questions for projects aiming to attract serious builders. David and Daniil Liberman, co-creators of the Gonka protocol, said decentralized networks must answer whether the infrastructure they provide could be used against builders; if so, they argued, the decentralization is cosmetic. The dispute highlights the practical governance challenges facing decentralized AI networks as they scale and onboard high-profile participants.