The AI boom is undeniable, with tens of billions of dollars pouring into startups over the past year.
Leading the charge is OpenAI, which recently raised $6.6 billion, pushing its valuation to a staggering $157 billion—over 10 times the fully diluted value (FDV) of $TAO.
OpenAI has transitioned from a research lab into a product-driven giant. By Q2 2024, its annualized revenue hit $3.4 billion, double what it was earlier that year. However, with huge revenues come equally large operational costs.
AI’s explosive growth is fueled not only by high valuations but also by an intense demand for talent, especially in tech hubs like the Bay Area, where AI expertise commands premium salaries. Yet, companies hiring globally are winning by tapping into cheaper talent pools across different markets.
This raises a crucial question: how can we fund, build, and scale intelligence beyond centralized AI labs? Crypto may hold the key, bridging the gap between two of the most exciting trends—AI and blockchain.
Web3 AI Project And The Hype Around Centralized AI
Web3 AI projects often mirror the hype surrounding centralized AI, attracting speculators without sustainable demand drivers. For instance, $TAO saw speculative surges in late 2023 and early 2024, while $WLD jumped 5x after OpenAI’s Sora release, despite no direct connection.
However, the speculative bubble burst in Q2 2024, with a 65% correction, although the Web3 AI market cap still rose to $30 billion, doubling year-to-date.
1/ AI mania is real. In just a year, tens of billions have flooded into startups.
OpenAI leads the pack, recently raising $6.6B and reaching a $157B valuation.
(This is over 10x the FDV of $TAO).
Will the AI wave spill into crypto? (🧵👇 ) pic.twitter.com/vuQ5eGX7oS
— Crypto, Distilled (@DistilledCrypto) October 7, 2024
The wake-up call is clear: speculation can only fuel prices for so long. For decentralized AI to thrive, real demand must emerge. Visionaries like Vitalik Buterin and Sami Kassab see AI as integral to the crypto economy, with Kassab coining the term “incentivized intelligence.” As projects like Bittensor aim to decentralize the entire AI stack, the next wave of Web3 AI could be on the horizon.
Disclosure: This is not trading or investment advice. Always do your research before buying any Metaverse crypto coins.