It seems the idea of AI and crypto is gaining some steam. As I surf the different headlines, a few more pieces are emerging connecting the two. This is something we discussed a great deal so no point diving into the basics. However, the fact that we are seeing more media coverage is a positive.
We know there are teams working on bringing AI to the Web 3.0 world. SingularityNet, headed up by Ben Goertzel was one of the forerunners. Over the last year, there are a number of initiatives that have sprung up.
Ultimately, the goal will be to get AI agents operating on blockchain. This will add value to the underlying coins that represent the networks along with providing the opportunity to tokenize the individual agents. It is a situation that could get very interesting when swarms of agents are created.
Much of the optimism is being driven by the new administration in the United States. In a few weeks, actions were taken that mirror the rhetoric on the campaign trail. Important positions are being filled by people who are pro-crypto. This is a complete reversal from the days of the likes of Gary Gensler.
Of course, optimism and sentiment only go so far. Action needs to be taken which brings about results.
Crypto: Top 3 Industry With Trillion Dollar Economic Opportunities
Crypto is the value capture asset. If we are looking at decentralized AI (DeAI), then this is indeed a multi-trillion dollar opportunity.
One does not have to look far to see how valuations are skyrocketing. OpenAI is reportedly going to fund the next round at over $300 billion. xAI, on the backs of its release of Grok3, is going to raise $10 billion at a value of $75 billion. This was a company that is only around 30 months old.
A big part of the shift in sentiment is the fact that Washington (DC) is changing its focus regarding crypto. The fact that it is no longer taking on an adversarial role is important. Actually, we now have a viewpoint where becoming the global leader is the goal.
The next few months provide a precious window for the crypto and AI industries. Crypto could easily become a top three industry with decentralized AI a main driver, and that AI agents and applications can create trillion-dollar economic opportunities in America.
The most interesting learning from the trip was understanding that many Congressmembers are open to industry input on how to define key concepts in crypto and web3 as a starting point to regulate the crypto industry.
Progress, up to this point, was made through the efforts of venture capital money. Larger institutions mostly avoided crypto due to the lack of clear regulations. This will be cleared up, albeit slowly.
What this means is there is a window for individual developers and teams to step in. The push towards greater decentralization is crucial. This is needed with data, agents, and infrastructure. We know Big Tech is making their move, and not in a decentralized manner.
The goal of people like Sam Altman is to lock out competition. His aim is to utilize regulatory capture, having governments decide the winners. This was the approach under the Biden Administration.
Decentralized AI - The Most Important Thing
To me, the only focus for the crypto industry should be on AI. Frankly, nothing else matters. This is Ground Zero for all battles in the future.
We already see this taking place geopolitically. The United States and China are racing ahead. At the same time, the EU is looking to get into the game.
This is a notion that can be structured as the centralized versus decentralized.
Decentralized AI has the ability to offer resources that traditional AI structures can not. Currently, resources are extremely centralized within Big AI and hard to access by new entrants and pose a threat to the future of Fair AI solopreneurs. OpenAI and Microsoft have made massive investments in servers, data centers, and network infrastructure related to training AI models. These high costs squeeze out solopreneurs and smaller teams, making it almost impossible to build AI systems without breaking the bank.
The goal has to be democratization. Again, this starts at the data level and works its way throughout the system. We need open source algorithms, models, and permissionless infrastructure. That is how things truly get democratized.
Decentralized AI infrastructure provides access to more affordable resources needed to build the future of Fair AI entrepreneurs: data, compute, open-source models, and hopefully capital, too. By incentivizing participants to share resources through decentralized networks, we can democratize access.
It is also what will usher in the Age of Abundance:
The future is here. Millions of builders will soon launch their side hustles, creating AI Agents and AI applications. They use an open-source model, power it with decentralized AI data and GPU, find a strong utility-based use case, launch a token to bootstrap liquidity and start earning income through usage and fees.
Web 3.0 Not Crypto
Even in this article, there is some misleading occuring.
The notion of "crypto" conveys market based activity. That is how most view it. They are after green candles and nothing else matters.
For this reason, a lot of this could be taken to mean invest in AI tokens. There is that opporunity but the goal is not to highlight a new bubble craze.
Instead, we are talking about the future of Web 3.0. One of the components, based upon my definition, is AI. This is what will be integrated throughout. We are going to see a move towards the "dead internet theory" although I do not take this to be a negative.
Automation is on the rise. Web 3.0 should be viewed as the Agentic Internet, an era where AI agents handle billions of tasks on behalf of individuals. These "skills" will allow anyone to benefit, especially financially.
It is actually no different than what Web 2.0 is pursuing. What needs to be highlighted is that system still has rentseekers at every turn. Web 3.0 has the opportunity to structure things in a much different manner.
AI will generate trillions of dollars in value. Even from a GDP perspective, we could see tens of tillions added each year to the global economy if the economic singularity kicks off. This probably equates to hundreds of trillions in value that will be captured by someone.
As always, the question is by whom? Will we see the Silicon Valley elite only deepen their pockets or will billions see a rise in their net worth.
If AI can become a top 3 industry, captured by crypto, we could see the latter coming to fruition. However, if Big Tech controls everything, then we will see Web 2.0 but on steroids.