The proliferation of mainstream artificial intelligence (AI) tools in the last couple of years has stirred the crypto and blockchain industry to explore decentralized alternatives to Big Tech products.
The synergy between AI and blockchain is built on addressing the risk of centralized ownership and access to data that powers AI. The theory goes that decentralization can mitigate against the entire AI economy being powered by the data owned by a few tech behemoths like Alphabet (GOOG), Amazon (AMZN), Microsoft (MSFT), Alibaba (9988) and Tencent (0700).
It is unclear as yet whether or not this will prove to be a significant problem at all, much less whether the blockchain industry will be able to solve it. What is clear, however, is that crypto venture capitalists (VCs) are willing to spend millions of dollars finding out. Decentralized AI has thus far attracted $917 million in VC and private equity money, according to startup deal platform Tracxn.
The question remains whether the trend of investing in blockchain-based AI is still built on hype or has now transcended to being the real deal.
Blockchain investment company Theta Capital described AI x crypto as “the inevitable backbone of AI,” in a recent “Satellite View” report, which explored insights and outlooks from the sector’s prominent investors.
AI agents
“No trend stands out more than the intersection of AI and crypto,” the report said, using the examples of AI agents trading on blockchains and even launching tokens.
This may appear to be a more sophisticated form of speculation for degens, but Theta argues it’s a route to tackling some of AI’s problems that only crypto can solve.
“Crypto wallets enable the participation of autonomous agents in financial markets,” according to the report. “Decentralized token networks are bootstrapping the supply side of key AI infrastructure for compute, data and energy.”
The report’s conclusion is far from being hype and speculation; AI x crypto is “the new meta.” Meta is short for “metagame,” a term borrowed from gaming referring to the dominant way of playing with regard to characters, strategies or moves based on the competitive landscape.
Decentralized AI
Alex Pack, managing partner of blockchain venture capital firm Hack VC, described Web3 AI as “the biggest source of alpha in investing today,” in the “Satellite View” report.
Hack VC has dedicated 41% of its latest fund to Web3 AI, according to the report, in which it sees the main challenge as building a decentralized alternative to the AI economy.
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