AI Crypto Startup O.XYZ Faces Allegations of Misrepresentation and Inner Turmoil: Sources – Decrypt

O.XYZ, a blockchain and AI firm touting crypto and synthetic intelligence providers, is dealing with allegations of falsely inflating its technological claims and fascinating in aggressive ways to suppress dissent inside the firm.Whereas founder Ahmad Shadid has defended each his and the corporate’s actions, a number of sources conversant in the corporate’s operations who spoke with Decrypt have refuted public claims, alleging widespread misrepresentation of O.XYZ’s capabilities.O.XYZ positions itself as a community-owned “Tremendous AI” ecosystem. The corporate claims to leverage substantial GPU computing energy, purportedly deploying tens of hundreds of open-source fashions, enabling it to execute a big selection of duties.Sources declare the corporate has exaggerated its capabilities, falsely stating it may well hook up with over 100,000 AI fashions, runs 20 instances quicker than rivals, and owns highly effective {hardware} it doesn’t truly possess. It’s additionally accused of inflating the worth of its satellite tv for pc program and misrepresenting its token launch, elevating questions on transparency and accountability.Because of these allegations, sources declare holders of the corporate’s not too long ago launched O.XYZ token are prone to being harmed.In an emailed assertion to Decrypt, Shadid issued an in depth response to issues raised concerning the firm’s claims, insisting that O.XYZ’s promotional language is “forward-looking” and aligned with its growth roadmap. Nonetheless, sources who spoke with Decrypt dispute this characterization, pointing to supplies on O.XYZ’s web site and investor displays that describe capabilities as present reasonably than aspirational.In June, Shadid stepped down as CEO of Solana-based decentralized infrastructure supplier IO.web—an organization he based—amid allegations surrounding his previous and misreported firm metrics, citing his resolution as a transfer to scale back distractions and concentrate on the corporate’s development.A public assertion Shadid revealed amid his departure from IO has since been deleted from Twitter (aka X). To keep away from conflicts and distance itself from Shadid, IO agreed to supply a “six-figure severance,” one supply conversant in the matter instructed Decrypt. IO earlier this 12 months raised $30 million in a Sequence A spherical from notable crypto business traders, together with Hack VC, Solana Labs, Aptos Labs, Multicoin Capital, and Animoca Manufacturers. A number of sources who've beforehand labored with Shadid described him as a “good, succesful particular person” who manages every time to assemble a extremely skilled group for the job. Nonetheless, each a former worker and an investor who wished to not be named said they might “by no means work with Shadid once more.”Disputed infrastructure and efficiency claimsIn response to allegations that O.XYZ is exaggerating its capabilities, Shadid highlighted the corporate’s investments in U.S.-based Cerebras Methods {hardware} and plans to deploy cutting-edge AI information facilities, asserting that its infrastructure helps “20x quicker” AI processing. He cited benchmarks of Cerebras WSE-3 chips as proof of O.XYZ’s efficiency leap.Sources dismissed these claims as “patently false,” as a substitute alleging O.XYZ has but to amass the required {hardware} for such operations, regardless of Shadid’s claims of “superior talks” with Cerebras.“There’s no inside benchmarking supporting the 20x determine,” one supply stated, who famous that the corporate’s routing expertise would possibly truly improve latency reasonably than scale back it.Deceptive Starlink and partnership claimsO.XYZ has additionally promoted itself as being powered by SpaceX’s Starlink, with Shadid emphasizing the expertise’s integration inside the firm’s operations. He additional clarified that the declare refers to O.XYZ’s ongoing infrastructure roadmap, together with plans for “maritime connectivity options” and future AI capabilities in area slated for 2026.Nonetheless, sources strongly contest that narrative. As a substitute, they assert Starlink is simply used for fundamental web connectivity in distant areas and performs no position in AI processing. “No satellite tv for pc designs exist inside the firm, and there’s no engineering group able to growing such capabilities,” one supply instructed Decrypt. They added that there are not any ongoing discussions with SpaceX, regardless of the impression created in advertising supplies.Shadid’s responses additionally addressed the show of logos from main organizations reminiscent of OpenAI and Neuralink, claiming they had been used to characterize contributors' backgrounds reasonably than formal partnerships. Nonetheless, sources allege that this apply misleads traders and clients, noting that contributors requested their logos be eliminated after leaving the corporate—a request that allegedly has but to be resolved.Controversy round token launchThe firm’s O.XYZ token launch on October 15 throughout a number of “lesser-known” exchanges has been one other flashpoint. Whereas the token solely averages round $23,000 in day by day buying and selling quantity throughout all exchanges—with a mere $8.1 million absolutely diluted token provide valuation—sources say it is solely a matter of time earlier than token holders are harmed.“There is no such thing as a approach to make use of the token to pay for something like API requires the corporate AI, nor does the token legally entitle the holder to any property of the corporate,” one of many sources stated.Shadid characterised the “preliminary liquidity pool activation” as occurring throughout a “testing section,” which was “instantly communicated to the neighborhood.”“After an intensive market situation evaluation, we made a strategic resolution to proceed with the launch reasonably than withdraw the liquidity, successfully advancing our deliberate token launch timeline,” Shadid stated.He added: “This resolution was communicated transparently via a number of channels, together with Discord and inside communications,” he stated. “Whereas the preliminary activation was unplanned, our subsequent resolution to keep up the token's availability was deliberate and strategic. We preserve complete documentation of all communications all through this course of, demonstrating our dedication to transparency with each our neighborhood and stakeholders.”One former worker who didn't want to be named, for worry of reprisal, shared that they had been provided monetary incentives tied to a non-disclosure settlement after questioning the moral implications of the launch. One other supply alleged, “Shadid was testing buying and selling algorithms when the ‘accident’ occurred.”“Was testing my O.CAPITAL market maker quant techniques, and it created a pool on Uniswap, and tokens went reside by mistake,” in keeping with a screenshot reviewed by Decrypt of a message from Shadid posted to a basic Slack channel for all workers to see. “I can’t take it down.”Secret recordings additionally reviewed by Decrypt seem to contradict Shadid’s rationalization. Sources say the token launch was as a substitute deliberate, and workers had been instructed differing tales—some that it was intentional, others that it was a “mistake.”“Completely towards what the public-facing firm docs would have individuals consider with traces of transparency and neighborhood possession,” one supply stated. “Ahmad owns all of the tokens successfully and may dump them at a whim.”Allegations of retaliatory practicesSources declare that O.XYZ has used non-disclosure agreements to suppress dissent. They described a tradition of retaliation, together with terminations following inquiries into the corporate’s operations. “The NDAs are being weaponized to silence professional issues,” one supply alleged.Shadid defended the corporate’s contractor-based employment mannequin and strict confidentiality agreements, stating these practices are customary within the business. Shadid has in a roundabout way addressed the allegations of retaliation, however emphasised O.XYZ’s dedication to “clear, correct communication” and “complete documentation” of its strategic targets.In any case, the allegations have led a number of former workers and contributors to hunt authorized counsel. Sources Decrypt spoke to say these former workers are actually exploring additional choices to make clear O.XYZ’s alleged practices.Typically Clever NewsletterA weekly AI journey narrated by Gen, a generative AI mannequin.