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How​‍​‌‍​‍‌ AI and blockchain are converging in the next generation of startups

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Image credits: Immo Wegmann/unsplash

Artificial intelligence and blockchain have largely developed in parallel. One is often associated with automated tasks, data interpretation, machine learning, and increasingly sophisticated digital assistants. The other has been centred on digital ownership, transparent digital records, decentralised networks, and digital asset management.

Prior developments have paved the way for both concepts to converge into mutually beneficial directions.

An increasing number of start-ups see opportunities for these technologies to combine and create synergies. AI can help make the decentralised world more user-friendly and capable of intelligent decision-making; on the other hand, blockchain, with its transparency features, can serve as infrastructure layers for fundamental concepts such as identity, payments, ownership, and verification services. Thus, a new class of companies exists that, only a few years ago, would have been impossible to imagine.

Reasons for investors’ interest at the intersection

Following this trend means looking not only at cases where a firm tacks on an AI or blockchain label to a product already on the market. Projects that go much further are interesting. The key is that in those products both technologies have to be essential. Sources like alphawire.xyz,  among others, could be really useful for readers who want to track companies, financial activity, technologies, and market shifts in this space. A more comprehensive picture of the startup sector than just a few individual company announcements helps with a better understanding of the gradual way in which AI and blockchain technologies are being connected as different components of one single technological stack.

This link will become even clearer when founders realise there are problems involving digital ownership and intelligent software that need solving. For example, an AI application might produce great content or enable autonomous decision-making. At the same time, blockchain infrastructure excels at creating an ownership trail of transactions and permission records.

So far, these developments have largely combined two popular technologies, but their significance lies in the fact that new products and services will need capabilities from both.

The development of AI agents into economic participants

Image credits: Steve A Johnson/unsplash

AI agents represent one of the most captivating topics nowadays. Instead of just answering queries, an AI agent can carry out several tasks on behalf of a person or their company, such as searching for information, comparison shopping, storing and organising data, and even buying servers or interacting with other software.

With blockchain as its backbone, an AI agent can:

  • Get digital payments after completing tasks
  • Buy computing power or digital services
  • Buy data access
  • Converse with decentralised apps
  • Keep your transactions in full transparency
  • Exchange value with other automated systems

This opens the door to developing an automated digital economy. Instead of a human approving every online transaction, computers could work independently within certain rules and budgets.

Digital ownership with the assistance of blockchain

Digital ownership is a hot topic right now, in part because of generative AI.

Generative AI produces images, software, text, songs, research, and all types of data in a blink! The more machine-generated content there is, the more important and valuable it is to know not only where it comes from but also who owns it. Blockchain is a good tool to record that information.

A startup, for instance, could use blockchain to create records showing when a digital asset was registered, who owns it, and how ownership has passed from one person to another. On top of that infrastructure, AI could help users create, find, classify, or analyse assets.

Blockchain serves as the backbone for always-accessible data, while AI is the brains.

This blend could be a great fit across different industries such as gaming and entertainment, software, and digital marketplaces.

Data might play a bigger role in the opportunity

For AI to work, it needs tons of data. Sophisticated models can only be built when there is data that is valuable, the kind you can get by working at an organisation that can make data about clients available. In most cases, data resides in different departments or silos. Blockchain projects aim to make trading datasets and tracking who accesses them more transparent and secure.

This kind of situation will allow startups to make connections between three parties in a whole new way:

  • Data owners who share valuable insights.
  • AI architects and modelers who desperately need data feeds to construct their algorithms.
  • People create the need for the resulting services.

In a blockchain-powered environment, one can monitor participants’ business through their exchanges of goods/services; simultaneously, AI will handle the actual production of the product, which is information in value terms.

Decentralised computational power might aid AI advancement

AI development requires extensive computational capability. The rise in demand has inspired entrepreneurs to develop decentralised computing networks that let individuals and companies share unused processing power.

It will help small AI companies find different ways to access computational resources without expensive infrastructure in the early stages. The blockchain-and-AI combo isn’t new, but the recent surge in blockchain adoption and AI development is taking the conversation to a new level.

Blockchain-based infrastructure facilitates coordination, while an AI component adds intelligence.

Emerging business opportunities from a new startup trend which combines technologies

Perhaps the biggest success of AI and blockchain integration does not necessarily lie in the companies constantly shouting about either tech. End users will decide whether a product is worth it.

So, a new batch of startups will probably take AI and blockchain for granted and run them silently underneath. For example, AI will make decisions while blockchain handles money and property-rights management, and a buyer may just enjoy a faster, smarter app.

That is what makes this conjunction of technologies fascinating. Rather than technology trends running against each other, AI and blockchain are different tools on the same product, at a time when technology convergence is becoming the norm.

As founders delve deeper and explore the potential of autonomous agents, digital ownership, decentralised computing, and data marketplaces, the lines that differentiated an AI startup from a blockchain startup may matter less than the issues the company is trying to address and resolve.

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