Venture capitalists doubt the prospects of crypto AI projects
Prospects for cryptocurrency AI
Investors are actively funding projects that operate at the intersection of cryptocurrencies and artificial intelligence. However, these projects are unlikely to challenge the dominance of major AI players in this cycle. This was stated at the Emergence Conference in Prague by Rob Hadick, General Partner at venture capital firm Dragonfly, and David Pakman, Managing Director at CoinFund.
As reported by The Block, the speakers urged developers to address actual market needs.
"Crypto projects often take things that work well off-chain, make them worse by putting them on-chain, and then sell them to people already on-chain," said Rob Hadick.
The venture capitalists concluded that AI’s main value for crypto lies in enhancing the efficiency of software development—a key component of the crypto space.
"AI represents a massive software revolution," Pakman noted, adding that Web3 developers could leverage AI to improve decentralized applications, infrastructure, and security.
However, both experts agreed that decentralized AI systems are unlikely to compete with centralized giants like OpenAI, Microsoft, or Meta in this cycle.
While some AI-based projects have sparked enthusiasm, Hadick expressed skepticism, stating that most investors would lose money in what he called a "winner-takes-all" market dynamic.
Why AI projects are booming
The popularity of artificial intelligence projects has been growing year by year, becoming one of the most significant technological revolutions of our time. This trend began in the mid-2010s when advancements in deep learning and big data analysis became accessible due to increases in computing power and data availability.
Breakthroughs like the 2015 launch of OpenAI and algorithmic improvements allowed companies to integrate AI into diverse sectors—ranging from healthcare and finance to entertainment and logistics. The boom reflects growing demand for automation, personalization, and large-scale data analysis enabled by AI technologies.
Today, major players in the AI space include giants like OpenAI, Microsoft, and Meta. OpenAI is renowned for its innovations like Chat GPT and DALL·E. Microsoft has integrated AI into platforms such as Azure and Office 365. Meanwhile, Meta (formerly Facebook) focuses on AI to enhance social media experiences and develop its metaverse vision.
The global "smart cities" market is expected to reach $1.29 trillion by 2025, highlighting the widespread adoption of AI-driven innovations.
