Author: Jun, Bankless; Translated by: Deng Tong, Golden Finance
Remember the good old days of late 2023, when AI tokens and stocks were the hottest thing? Well, those days are gone — for now. The market has cooled off, leaving many investors wondering if the whole AI thing was just a passing fad?
People are easy to fall into pessimism.
If we put on our tech-optimistic glasses for a moment, we’ll see that while investor enthusiasm for AI has cooled, the underlying technology continues to improve and gain adoption.
Let’s take a closer look at the current state of the AI industry.
Artificial intelligence: a balance between optimism and caution
After a frenetic run, AI hardware and infrastructure stocks (like Nvidia, Dell) are experiencing a cooling-off period. Bloomberg reports that these stocks are facing increasing selling pressure as market sentiment changes. Global markets are in a state of panic over concerns about future spending, and the entire market feels a little... jittery.
Adding to the market’s unease, The Wall Street Journal raised concerns that the market’s excessive focus on AI could lead to an echo chamber effect of overvalued valuations.
Big tech companies like Google, Meta, OpenAI, and others are investing heavily and snapping up semiconductors. As a result, the companies that make the shovels (in this case, chips and data centers) are making a killing. This feeds a feedback loop where the growing demand from these tech giants drives up the earnings of AI infrastructure companies like Nvidia, creating a self-serving AI echo chamber.
So while strong performances from leading AI companies have led to perceptions of overall industry success, concerns have arisen about a possible lack of innovation on the application side. If you think about it, this is a bit like the “we need more applications, not infrastructure” argument we’re all too familiar with in crypto.
But here’s the thing: the underlying trend in AI adoption remains positive.
Let’s explore why smart money, including Wall Street, continues to bet big on AI:
Retention rates for AI products are skyrocketing – Enterprises no longer view AI as a passing fad. Just a year ago, only 40% of enterprises that purchased AI products continued to use them a year later. Today, that number has jumped to 70% or more. This dramatic increase in retention rates shows that enterprises are discovering the true value of AI solutions.
AI is actually making us more productive - businesses and individuals are finding ways to use AI tools to be more efficient - productivity is hitting an all-time high, and AI is likely responsible for much of this. AI is subtly but undeniably making our daily lives easier and more efficient.
The market is expected to grow – let’s talk numbers. The global generative AI market is expected to grow exponentially over the next decade, at an estimated annual rate of 40%, surging from $40 billion in 2022 to $1.3 trillion in 2032.
Now let’s shift our focus to the Wild West of AI: Crypto x AI.
If we look at the funding numbers, we see that venture capital firms are betting on crypto x AI. Despite the decline in overall crypto funding since 2021, crypto x AI projects are attracting an increasing share. The sector managed to secure $450 million in funding in 2024, accounting for 7% of the total $6.3 billion raised by crypto projects in 2024.
But if we’re being honest, most crypto projects don’t actually need AI, and most AI projects wouldn’t benefit from being tied to a blockchain.
That means investors face a difficult task: identifying the rare gems with real substance, where crypto and AI truly come together to create something meaningful.
But wait, there is a glimmer of hope. Beneath the surface of this crypto-AI chaos lies a real ray of hope.
In fact, decentralization and open source development, the core values of crypto, can help AI become more fair, transparent, owned and built by the community. On the other hand, AI can help improve the user experience of crypto and increase efficiency through AI agents.
To see a curated list of promising crypto x AI projects that are more than just hype.
Summarize
AI still has its place and is getting a lot of attention. Sometimes, even when things get a little tough, a little chit-chat is all it takes to keep the fire burning.
But let’s be blunt — the crypto x AI space is like a high-stakes poker game. There will be a lot of deception and empty promises.
That being said, history tells us that disruptive innovation often comes from unexpected places. Maybe, just maybe, there’s a hidden gem waiting to be discovered at the intersection here.
So while caution is advised, the potential rewards in this high-risk, high-reward crypto x AI space make it an undeniably fascinating area to be in. The current downturn in AI stocks and tokens may be a temporary phenomenon in line with broader market price action, but the long-term potential of the industry remains a cause for optimism.
