Crypto AI Needs a Showcase to Know What's Real

As Microsoft and Google go head to head on artificial intelligence, crypto needs to prove its recent AI-themed rally is worth anything.

AccessTimeIconFeb 8, 2023 at 7:05 p.m. UTC
Updated Feb 8, 2023 at 8:04 p.m. UTC
AccessTimeIconFeb 8, 2023 at 7:05 p.m. UTCUpdated Feb 8, 2023 at 8:04 p.m. UTC
AccessTimeIconFeb 8, 2023 at 7:05 p.m. UTCUpdated Feb 8, 2023 at 8:04 p.m. UTC

JPMorgan seems to have confirmed what everyone already knows: The emergent world of artificial intelligence (AI) is the top trend of 2023. In a recently released survey of 835 institutional traders, some 53% cited AI and machine learning when discussing the technologies most likely to reshape finance over the next three years. The tech behind Web3 – namely blockchain and distributed ledgers – ranked third, down a peg from last year when JPMorgan had AI and crypto tied for second in its annual "The e-Trading Edit" report.

There are several ways that AI is already influencing the markets. As Barron’s reported, AI-related stocks have ripped in a way reminiscent of crypto’s legendary bull runs. But that doesn’t mean crypto isn’t also having its fun. CryptoSlate composed an index of 73 AI-linked cryptos representing some $4.63 billion in value. The total index is up 87% in the past seven days alone, with some specific tokens seeing triple digital returns.

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Much of this recent action was kick-started by the release of OpenAI’s ChatGPT, a chat platform some are convinced could pass the Turing Test, designed to measure whether a machine can be taken for as a human. The tool is impressive – it can write smart contracts, compose poetry and is threatening Google’s monopoly on search. Last month Microsoft invested $10 billion in OpenAI to bring its technologies into its industry-defining software suite.

But look no further than Google’s response to OpenAI to see some of the challenges AI has yet to surmise. Today, in a livestream from Paris, Google showcased its own AI chatbot called Bard (based on its proprietary software LaMDA, or Language Model for Dialogue Applications), which among many things also “hallucinated” that James Webb Space Telescope took the first photo of an exoplanet (an honor earned by the European Southern Observatory’s Very Large Telescope in 2004). Investors were seemingly less than impressed.

Bard is expected to be rolled out across Google’s technology suite within weeks, possibly in much-used apps including Google Maps and search. The threat of AI has reportedly scrambled Google co-founders Larry Page and Sergey Brin back into action after stepping back from daily activities years ago. And while there are technical hiccups to overcome, it seems possible artificial intelligence could lead to a new age of innovation.

The opportunity is apparent in crypto, too. The Alethea image generator is using a token to offset costs of NFTs and offer user incentives. Fetch.ai helps people build decentralized and autonomous software, with possible applications in the “internet of things.” Artificial Liquid Intelligence records property rights for blockchain AI assets. Platforms like these could one day create cheaper or less privacy-intrusive AI platforms and help share in the wealth created by the next big technological shift – rather than Microsoft and Google reaping all the rewards.

But the soaring prices of AI crypto tokens is a worrying indicator, a reminder that crypto’s primary use case today is speculation. “There is a risk that this whole ‘new trend’ is going to end up in an empty hype, as there are many speculators that would seek to make use of short-term price pumps,” financial market consultant Valentina Drofa told CoinDesk’s Shaurya Malwa. Crypto AI needs a showcase of its own.


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Daniel Kuhn

Daniel Kuhn is a deputy managing editor for Consensus Magazine. He owns minor amounts of BTC and ETH.