This year there has been a debate about whether improving artificial intelligence will help humanity or threaten the species. But since it's clear that great models of language learning aren't going away, one idea that's gaining ground today is that cryptocurrency's blockchain technology could help keep at least some of the social risk in check. It's an opportunity worth watching for investors, and crypto speculators have recently been doing just that. AI-related cryptocurrencies skyrocketed on Wednesday after memecoin influencer Elon Musk announced the launch of his new artificial intelligence company, xAI. They saw a similar rise in May after Nvidia reported growing demand for chips that power AI applications. It may be too soon to find serious investment opportunities. To many, today's climate seems like a chaotic combination of two young technologies that few understand, coming together to recreate the levels of hype of the dotcom era. Others see the crossover between the worlds of AI and cryptocurrency as inevitable. "There will be some silver and bronze wins, but the big gold medal that people are after is uniting these cross-strengths around automation and efficiency," two of the top values โโin AI and cryptocurrency, Jack O' said. Holleran. , co-founder and CEO of blockchain company Skale. Grayscale Investments recently highlighted three potential risks posed by AI that cryptocurrencies could limit: identity verification, centralization, and data ownership and privacy. "Consumers' ability to maintain the privacy of this data remains paramount," regardless of whether or not companies choose to monetize user data, Grayscale said in a report. "At the most extreme risk, access and exploitation of sensitive information could have detrimental consequences, including identity fraud, unauthorized access to banking information, potential discrimination, or even blackmail." โWe believe that blockchain can enable people to combat the trend of data monetization and centralized privacy risks by allowing people to maintain sovereign ownership over their personal data in a way that preserves privacy,โ the report added. O'Holleran said he believes the biggest companies in AI either don't exist or are early-stage startups. At this point, investors who want to play the crypto-AI crossover can buy stocks that provide broad exposure to both industries, such as chipmakers and a few other tech companies, or invest in early AI-related crypto protocols, William Ogden Moore, a Grayscale research analyst told CNBC. Accredited US investors can gain direct exposure to AI-related crypto protocols by investing in fundraising rounds from private companies, he added. For non-accredited investors, there are several tokens tradable on crypto exchanges, but these are extremely early projects with small market caps. Investors must carry out proper investigations and due diligence checks. Building Opportunities New projects have been springing up this year. Venture capital giant Andreessen Horowitz, also known as a16z, led a funding round this summer at Gensyn, which aims to use its blockchain-based computing network to help developers train AI models. Another startup called Giza raised money this week for its platform, which aims to help embed machine learning into smart contracts. Sam Altman, the man behind OpenAI, father of ChatGPT, reintroduced his own crypto-AI hybrid, Worldcoin, this summer. Built on the Polygon blockchain, it aims to offer people a digital wallet and digital ID to help distinguish bots from humans. โSo far in 2023, VCs have invested $422 million in AI, privacy, and identity-related crypto applications,โ according to Grayscale. โIn total, the crypto-AI intersection represents more than 10% of total crypto venture capital (VC) funding to date, including two of the four largest funding rounds.โ The perfect time? The smart contracts at the heart of the blockchain movement aren't particularly smart like artificial intelligence technology is, but they are "phenomenonally valuable" for automating payments, O'Holleran said. AI, on the other hand, does not have secure programmable money functionality. "When you combine those two things, the number of use cases where you can use smart contracts, I think, will grow exponentially across many high-volume, low-cost transactional processes and workflows," he said, including transportation, shipping, social and consumer internet, advertising, technology and games. O'Holleran, who started working on AI in 2008, recalled how "reticent" people were at the time to even use the term AI, which was far less advanced than it has become since. "Frankly, a lot of AI has been doing very basic things or extracting information for things that are obvious," he said. "We've reached this knee of the curve; suddenly AI is really smart. I can't tell you how many use cases are waiting to be driven by AI. It's this massive move." Blockchain technology is much younger though , your community has similarly talked for years about the huge user base you would grow if you focused on the right use cases and built the right products. It hasn't found that explosive growth yet, but market participants say it will if it can take cryptocurrency beyond the online casino era and show that it has greater daily utility.
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What investors need to know about the crossover between A.I. and crypto
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