BitTensor AI Token Plunges as Top Builder Departs Over Decentralization Doubts

In brief

• TAO has fallen more than 18% in the last 24 hours amid a spat between the network’s founder and a leading ecosystem contributor.
• The subnet operator, Covenant AI, is leaving BitTensor after alleging centralized control by the project’s founder, Jacob Steeves.
• Steeves denied the claims, but the market reacted negatively regardless.

Tensions between the founder of BitTensor and a prominent firm building on the decentralized AI network have helped put TAO, the native BitTensor token, into a spiral, falling 18.5% in the last 24 hours amid the public drama.  The plunge comes as Covenant AI, one of the best-known subnet operators on BitTensor’s network, announced its intentions to leave the ecosystem altogether, alleging malfeasance by BitTensor founder Jacob Steeves, who it claims has acted out against the firm building on his network. “When a single actor can suspend a subnet’s emissions, override an owner’s authority over their own community spaces, publicly deprecate projects without process, and use token sales as a coercive mechanism to compel compliance, that is not decentralization,” Covenant AI founder Sam Dare posted on X.

“It is centralized control with decentralized branding,” he added.   Dare alleged that Steeves suspended Covenant’s subnet emissions, the method by which TAO distributes tokens to miners and validators for performance within subnets. He also alleged that Steeves exerted his control over Covenant’s community spaces, hampering the firm’s ability to communicate with its community.  But Steeves denied the claims, alleging that it was Dare in fact who was deprecating community channels and deleting posts from within.

“I do not have the ability to suspend emissions,” Steeves posted on X.  Covenant recently gained attention for the permissionless training of the Covenant-72B model, an act that was highlighted by billionaire Social Capital founder Chamath Palihapitiya and was detailed to Nvidia founder Jensen Huang on the “All-In Podcast.” Around the time of the airing in March, TAO surged around 50%, jumping from $247 on March 19 to $370 just a week later.

Jensen Huang was on All-In last week and Chamath hit him with a question about Bittensor $TAO.

Specifically about Covenant-72B - a model trained permissionlessly across 70+ contributors on regular old commodity internet.

(No data center. No billion-dollar GPU cluster.)

Chamath… pic.twitter.com/YzXXQCIfiJ

— Milk Road (@MilkRoad) March 23, 2026

The firm operated three subnets—or markets dedicated to producing a specific AI task—on the network. For example, its Templar subnet (SN3) was focused on decentralized pre-training, while Basilica’s (SN39) focus was on decentralized compute—distinct parts of the artificial intelligence stack.  “We cannot in good conscience continue to build on a network where the foundational claim we make to our investors, that this infrastructure is decentralized and permissionless, is contradicted by the reality of how the network is actually governed,” Dare said in his statement on the incident.  “It is therefore with deep frustration that we announce Covenant AI’s departure from the BitTensor network,” he added.  The firm’s trio of subnets now show as “deprecated” among other active subnets according to BitTensor block explorer, Taostats.

TAO recently changed hands around $272.70, having erased nearly all the gains since Covenant’s model training was noted on the “All-In Podcast.” The token is down about 64% from its all-time high of $757 from May 2024.