If you haven't checked, there was a huge car crash at the intersection of Crypto and AI.
Leaders in the vertical - Virtuals, AI16z, OLAS, TAO, and FET have all taken brutal beatings in the past couple months, and beta plays like Cod3x, Luna, and Zerebro are on life support.
Is This the End?
If you're a crypto investor, your algorithm probably convinces you that AI is nearly universal in both consumer and industrial markets. This is far from the truth.
We are in the earliest stages of adoption, with a majority of usership coming from millions of people 'dipping their toes in.'
I think we're a few years away from general market saturation. This is good for investors, but only if you're ready to grit your teeth while the market tries to figure out what it's all worth.
Where is the Opportunity?
We're going to see some unicorns born in the next few years building out better middleware for AI.
There is a pressing need to manage the scope of work we're throwing at these huge models, and we're running headfirst into infrastructural constraints along the entire stack. Energy infra, chips, data centers, and the industrial materials that power them are bottlenecking growth, forcing the whole industry to pump the breaks.
This consolidation comes with a management of expectations and a severe need to limit overhead costs while we wait for compute to get cheaper and models to get better.
Middleware can help take a load off the underlying infrastructure and improve efficiency overall without the need for huge technological breakthroughs.
Where Crypto Fits In
When global markets get volatile, altcoins and AI memes are the last things you want in your portfolio. Adding to this, I'd be extremely surprised if any AI projects in crypto are even making money right now.
I do know, however, that liquidity and froth will eventually return.
I am personally comfortable with my AI exposure via $CDX, but if I were to build up a different position while prices are low, I would look at companies building valuable datasets with solid adoption (Arkham, Kaito).
