Written by: 0xjs@Golden Finance

Despite the recent sluggish crypto market due to selling pressures such as the Mt. Gox payout and the German/US government selling BTC, VCs are still continuing to bet on the crypto market.

This can also be seen from the data. On July 2, 2024, the financing obtained by encryption projects exceeded 160 million US dollars.

Among these projects, Sentient is the most eye-catching, raising US$85 million alone, accounting for half of the total financing amount.

In addition, there are two particularly eye-catching aspects of Sentient's $85 million financing.

1. It is a seed round of financing, which is jokingly called by netizens as redefining the "seed round". 2. The investors are particularly luxurious: Founders Fund under Peter Thiel, a well-known Silicon Valley investor, led the investment, Pantera Capital and Framework Ventures co-led the investment, and the participating VCs are also well-known (Ethereal Ventures, Robot Ventures, Symbolic Capital, Delphi Ventures, Hack VC, Arrington Capital, Primitive Ventures, IDG Capital, Sky9 Capital, HashKey Capitalo).

So who exactly is Sentient? What kind of project is it? Why has it attracted so many top VCs to invest in it?

What is Sentient?

According to the Sentient Foundation, Sentient is an AI research organization dedicated to building a new Open AGI economy for AI builders and creators. Sentient is building platforms and protocols that enable open source AI developers to (1) monetize their models, data, and other innovations, (2) collaborate with each other to build powerful AI, and (3) become important stakeholders in the new Open AGI economy.

Sentient believes that currently closed-source AI dominates the AI ​​field, concentrating enormous power in a few organizations. Although open-source AI exists, it lacks sufficient incentives for developers, and its performance cannot match or even surpass closed-source AI. Sentient envisions a future where the development of AI is open and transparent, and its access and monetization are decentralized.

From the information disclosed so far, Sentient has very few technical details and only some rough ideas. Sentient will build an AI platform where AI developers are the main force and major participants. They build powerful AI products through innovation and collaboration, relying on the economic coordination provided by the underlying blockchain and incentive mechanism to achieve Open AGI. The AI ​​model hosted on Sentient is "Open, Monetizable, and Loyal" (OML). The OML model will promote the shared Open AGI economy and provide support for downstream applications of millions of AI agents and billions of AI users.

According to Sandeep Nailwal, co-founder of Polygon and creator of AggLayer, Sentient will be built on the Polygon Agglayer.

Sentient Team and Founding

Looking through Sentient's official information, it can be found that the core figures of Sentient include Sandeep Nailwal, co-founder of Polygon and founder of AggLayer, Sreeram Kannan, founder of EigenLayer, Pramod Viswanath, professor of Web3 at Princeton, and Himanshu Tyagi, professor at the Indian Institute of Science (IISC).

They are the founders of hugely successful star encryption projects (Polygon and EigenLayer) and well-known professors in academia, so it is very understandable that they have attracted huge bets from top VCs.

As Founders Fund partner Joey Krug bluntly stated, investing in Sentient is primarily an investment in the team.

Sandeep Nailwal talks about the origins of Sentient:

I was in Dubai a while ago with Sreeram Kannan, founder of EigenLayer, to discuss my thoughts on how cryptography can solve centralization and security issues in AI, and how Polygon can play a role in shaping this major shift in humanity. I told him, but what if AI models were loyal to the community of their creators? He didn’t laugh. Instead, he asked a lot of questions, and I explained my thought process to him. Finally, he said, this could be huge. He shared my thinking with Princeton professor Pramod Viswanath (who is the co-inventor of Flash OFDM, the technology behind the 4G wireless standard) and Himanshu Tyagi of the Indian Institute of Science (IISC), who are already working on something similar. Pramod said this idea could give rise to a whole new branch of AI+cryptography research, which he called AI-native cryptography. This research became Sentient.

It will be built on Polygon Agglayer, and I will be helping them as a core contributor. This project is very ambitious, model-fidelity, and it tries to solve a problem that has never been solved from this direction. With this financing, Sentient has attracted some of the best AI talent in the world, and the AI ​​team is also working with senior talents from Google, Deepmind, and other world-class AI companies. If successful, Sentient may change the relationship between humans and AI. Let's try to build it and see how it goes.

Other contributors are also elites from academia and industry, including:

Why investors invest in Sentient

After Sentient officially announced that it had received seed round financing, the heads of the VCs involved in the investment also came out to write articles to share their thoughts behind investing in Sentient.

Tommy, co-founder of Delphi Digital and founding partner of Delphi Ventures:

A black-box authoritarian AI future is the enemy, while global, permissionless AI innovation is the goal. The Sentient team is focused on hosting open source models that the world can audit and build upon, but combined with crypto incentives to ensure that capex costs and value are protected, which is ambitious but will be very important if solved.

Framework Ventures：

We just co-led an $85 million funding round for Sentient, an AI research organization building a new open AGI economy for AI builders and creators. Here’s why we’re excited to support this team.

The current state of AI is reminiscent of the closed-source software era of 1995. A small number of organizations dominate, concentrating enormous power. Open source AI development exists, but there are insufficient incentives to allow developers to become equal stakeholders.

Sentient enables open source AI developers to (1) monetize their models, data, and innovations, (2) collaborate to build powerful AI, and (3) become key stakeholders in the new open AGI economy. We believe this will be a game changer for the AI ​​community.

Sentient is building an AI platform that relies on underlying blockchain protocols and incentive mechanisms. AI models hosted on Sentient are "Open, Monetizable, and Loyal" (OML), meaning they are aligned with the community that built them and enforced by the blockchain.

Joey Krug, Partner at Founders Fund:

Our investment in Sentient is primarily an investment in the team, but there are also some interesting topics related to open and closed source AI. I have known Pramod and Sandeep for many years and they are both super sharp technologists. Pramod did a lot of early work in wireless networks and has published many novel papers in the crypto space (on scaling, networking, etc.). I first met Sandeep during the Augur days when we were working on Matic (now Polygon). I am very happy to see him leading Sentient. One of the great things about Founders Fund is that our partners and the founders of the projects we invest in can have different perspectives, and we actually welcome this!

While I believe the pros of open source (even natsec adjusted) outweigh the cons, I agree with the view below that the economics of open source AI make no sense today. Software with high capex is very different than traditional software with low capex. If you spend $10 billion training a model, you can’t give it away for free. Our investment in Sentient is designed to change that. They are trying to embed cryptography into the LMS (learning management system) so if you don’t pay for the model you can’t use it. They call it “model fidelity”. This way the model can still be open source but not actually be used without paying for it. An MVP of this model could be released using Nvidia’s recent TEE trusted hardware. A rough mental model is that Ethereum is open source but not free to use, or something like DRM (digital rights management).

This is certainly a huge research challenge, but if they solve it, it could actually allow for the monetization of open source AI models. If you can monetize them, capitalist incentives could drive more powerful/smarter open source models than are possible under the current paradigm.

Paul Veradittakit, Partner at Panteral Capital:

Sentient's technology will pave the way for a new era of AI. By promoting an open source, community-governed approach to AGI, Sentient will enhance innovation, collaboration, and transparency. The goal is for Sentient to not only compete with existing AI solutions, but also redefine the standards for ethical AI development and deployment.

Dovey Wan, founder of Primitive Ventures:

Monopolistic control of AI power will drive everyone to fight for data, models, and computational autonomy. Sentients will challenge incumbents and lead the d/acc movement. We are witnessing the convergence of several trends: binary code becomes monetary code, machine programs become social contract programs, and human languages ​​become programming languages. This convergence heralds the advent of a new era. Humanity needs: Embrace the principles of decentralization, transparency, and collective ownership.

Franklin Bi, Partner at Panteral Capital:

Let's make sure Open AI beats OpenAI. In the long run, open systems beat closed systems.