2023 could be described as the year of AI as its amalgamation with Web 3 took center stage, which sparked a wave of innovation, opening up a plethora of exciting possibilities and transforming the digital landscape across industries, with projects operating in this domain raising more than ~ $520 million.
This blog navigates through the dynamic state of AI during this pivotal year. From the staggering market capitalization to the emergence of groundbreaking projects like Worldcoin and Render Network, we delve into the key developments that defined the AI landscape.
AI Market Overview
- Market Capitalization
The market capitalization of AI based companies reached a staggering ~ $15 billion in Nov ’23. The tokens included below for analysis hold a combined share of ~ 20% in the AI sector. The Graph token (GRT) emerged as the frontrunner and was closely pursued by Render (RNDR) and Injective token (INJ). The combined market capitalization of the Top 5 AI coins skyrocketed from around $746 million at the start of 2023 to a whooping $3.7 billion by November ’23, marking an astounding ~ 400% surge.
- Key Projects
Fetch AI: It is an open-access decentralized machine learning blockchain network, established to foster the digital economy’s evolution without human intervention by linking IoT devices and services. In 2023, it raised $50 million for increasing their footprint across the globe and developing more automation and AI tools.
Worldcoin: Founded by OpenAI’s CEO Sam Altman, Worldcoin garnered significant attention as they announced a rollout of 1500 orbs in more than 20 countries to scan irises, create digital identities, and reward the users for sharing their data. They amassed ~ 2.5 million users in 4 months. The founders aim to combat financial disparity by proposing the project as a universal basic income tool for distributing funds in exchange for iris scans.
Render Network: It is a pioneer in decentralized GPU rendering. It uses a blockchain marketplace for idle GPU compute, offers artists cost-effective scalability and faster rendering speeds compared to centralized GPU clouds for next-generation projects. In 2023, they integrated AI into their operations to handle AI/ML workloads via the network’s API.
Trends
- Decentralized AI emerged as the biggest trend in 2023 and was embraced by leaders such as Nvidia. This trend has the potential to solve various traditional problems such as enhancing data privacy by distributing information across multiple nodes, managing vast datasets and complex tasks using distributed computing and much more.
- AI driven smart contracts emerged to elevated responsiveness. This integration enables contracts to dynamically adapt without manual code updates. AI-driven oracles empower smart contracts in dApps for executing tasks autonomously and adjusting terms based on real-time data.
- In the Web3 realm, companies embraced AI to streamline daily life, mirroring trends seen in Web 2. For instance, Fetch.ai introduced a bot that uses AI to automate tasks like flight reservations through a “digital twin”, which acts on behalf of users.
- Web3 projects increasingly utilized AI to craft advanced analytics tools. For instance, Alchemy introduced the GPT-4 plugin designed specifically for blockchain analysis. Solana unveiled a ChatGPT plugin, enabling users to purchase NFTs, transfer tokens, and analyze on-chain data.
Expert Opinion
Gautam Arjun, CEO, Edverse
Education and training has remained a shining use case for metaverse. As we enter 2024, renewed optimism emerges and the EdTech resurgence is imminent, driven by AI.
Lesley Fung, Senior Researcher, Footprint Analytics
The convergence of AI and crypto, while too early to tell, could be in the area of mass adoption or user education. As AI brings in more users, the Web3 gaming sector, which is seen as a gateway to new Web3 users, is also poised for explosive growth.
Mona Tiesler, Investment Manager, Tokentus Investment AG
The evolving landscape of AI presents significant breakthroughs in security, enabling the detection of fraudulent financial transactions. Moreover, AI contributes to efficiency by optimizing calculations, reducing miner load, and subsequently minimizing network latency for faster transactions.
Future Outlook
AI’s role in enhancing human creativity is set to grow, benefiting a range of sectors from foundational work in the metaverse to building smart contracts and business process optimization.
The imperative to regain control over personal data in an era rife with privacy concerns will drive the adoption of Web3’s digital IDs and we are likely to witness more projects in the domain of identity and data that overcome the issue of privacy and deep fakes. This shift toward decentralization will challenge the dominance of Big Tech giants, fostering trust and autonomy.
Token based models are likely to be used as rewards for refining AI models and gathering significant real-world data, intersecting with DePIN networks which are blockchain protocols that operate in a decentralized manner, constructing, maintaining, and managing physical-world infrastructure.
The integration of large language models (LLMs) with zero-knowledge proofs (ZKPs) – ZKML could be a major trend in 2024. Anticipated advancements in models such as GPT-5 and Llama3 are set to amplify LLM capabilities. ZKML could help to compact proofs and enable ethical AI and privacy-preserving verifications, reshaping decentralized systems.
Expert Opinion
Sujit Roy, Co-Founder, BrainAlive
The latest advancements in AI, particularly foundation models that use blockchain technology, are creating better ways to keep your data safe and reliable. As we move forward, these AI systems will focus more on data and even reward people for sharing their information. Adding ‘Explainable AI’ to the mix, which means making AI decisions easier to understand, is another key step in building trust between people and AI technology.
Crypto Outlook 2024
2023 was a roller-coaster ride for the crypto sphere, marked by dynamic shifts, innovative advancements, and transformative trends that reshaped the industry’s landscape. Our Crypto Outlook Report for 2024 reflects on the highs, lows, and pivotal moments that defined the past year, while also peering into the horizon to forecast the exciting potential and emerging patterns set to influence the year ahead, with insights from industry leaders at Stepn, Enjin, Hacken, SuperScrypt, and more.
Click here to read the full report!
