Research Summary
The report highlights the growing interest in artificial intelligence (AI) within the crypto space, as evidenced by Google search trends and the performance of AI-related tokens. It discusses the convergence of AI and crypto, the rise in funding for AI projects, and the potential of AI in decentralized applications and data analytics.
Key Takeaways
Surge in AI Interest and Funding
- Record High Funding: AI-related web3 projects received a record high of US$298M in funding in 2023, surpassing the total funding from 2016 to 2022, which was US$148.5M.
- Strong Market Performance: The top five AI coins by market capitalization outperformed BTC and ETH, with gains ranging from 200% to 650% in 2023.
AI’s Potential in Crypto Space
- AI Chatbots Growth: AI chatbots like OpenAI’s ChatGPT experienced rapid user growth, reaching 100 million users in just two months.
- New Trends and Use Cases: The convergence of AI and crypto has led to new trends and use cases, including decentralized physical infrastructure networks (DePIN) and interactive consumer dApps.
AI’s Resilience in Attracting Investor Interest
- Increased Share in Startup Funding: AI’s share of US startup funding doubled in 2023, accounting for about 26% of the total, despite a general downturn in funding across sectors.
- Sustained Investor Interest: The AI sector saw a relatively small decrease in funding, with just a 6% drop compared to a 65% decrease in non-AI sectors, indicating sustained investor interest in AI.
AI’s Role in Decentralized Physical Infrastructure Networks (DePIN)
- Increased Demand for GPUs: The surge in AI interest led to a significant increase in demand for GPUs, causing a shortage and making computing costs prohibitive for many researchers and startups.
- Growth of Decentralized Compute Networks: Decentralized compute networks, a subset of DePIN, have emerged as an alternative to centralized cloud providers, offering a marketplace for idle GPU power to be shared.
AI Integration in Consumer-Facing Decentralized Applications (dApps)
- AI User-Generated Content (UGC) Platforms: AI UGC platforms like NFPrompt exemplify the trend of AI integration in dApps, where users create content with the assistance of AI, following a set of rules that automate output and incorporate randomness.
- AI in Web3 Gaming and Virtual Worlds: AI integration leads to more interactive in-game characters and life-like conversations in web3 gaming and virtual worlds, enhancing user engagement through personalized experiences.
Actionable Insights
- Explore the Potential of AI in Crypto: With the surge in interest and funding for AI-related projects, it’s worth exploring the potential of AI in the crypto space, including its role in decentralized applications and data analytics.
- Consider the Impact of AI on GPUs Demand: The increased demand for GPUs due to the surge in AI interest has implications for researchers and startups, making it important to consider alternative solutions like decentralized compute networks.
- Understand the Role of AI in User-Generated Content: The rise of AI UGC platforms indicates a shift towards more interactive and participatory content creation, which could have implications for the future of content creation and consumption.
