AI and Web3 | Mohamed Fouda & Qiao Wang of Alliance

Bankless Nation, we have an exciting topic for you today. You knew it was coming. We had to talk about artificial intelligence, that is AI and crypto and their intersection. Are there investable opportunities here for us? We've been talking so much, David, about uh AI safety, AI alignment, AI doomer type scenarios that we haven't given this enough attention. And the truth is, regardless of the long term consequences and uh, you know, the safety that we need to get right, there are actually some investable opportunities in AI, and there's some intersection between crypto and AI. And so we're gonna talk about that today.

You know what's interesting about this, Ryan, was this was actually this question is like, what does the intersection of AI and crypto look like?

The impetus for our original aliaser episode.

That's why we did that. And uh then we got it's massively sidetracked with a uh the AI is going to repurpose the atoms. But um,

before they repurpose our atoms, they are going to produce new opportunities for us. So, on the way of getting our atoms repurposed or not, uh, we are going to discover what those opportunities are.

Tell us, who are we having on today to talk about this intersection? In fact, is there an intersection between AI and crypto? We shouldn't presume that there is. Of course, there's a lot of mean coins in crypto being created that that sort of used co op the AI brand name. But what is AI and crypto? What do they have to do with each other? Who do we bring on today and what's the discussion going to be like?

Yeah, I think the first the discussion of AI and crypto really needs to start at first principles, which is something that you and I are really good at, and something that I definitely saw um articulated in this blog post from Kiao and uh Chao and Mohammed Mohammed from Alliance Dow. So Alliance Dow invests in the Web3 space across different verticals and ecosystems. Uh and they wrote a blog post called The Convergence of AI and Web3, which, like I said, was exactly the subject matter that we wanted to go after originally. And so they've ideated, they've thought about some particular use cases, uh, AIs as economic agents, uh, the the collaboration between ZK, uh ZK proofs and machine learning uh and data sets and running machine learning algorithms on all of that kind of stuff. Uh, AI and gaming, AI and NPCs, AI and DeFi. Uh and so while this might be um a podcast episode about ideation, this will certainly strike the imagination of the listener as we go and explore because after all, Bankless is a futurist technologies podcast. So we're going to explore the frontier of future tech.

Yeah, I'm super excited about this conversation, particularly the intersection between crypto, AI, and identity. I think we really need a way to figure out who the humans are and who the robots are because increasingly it's a little bit hard to tell, David. Guys, we're gonna get right to the episode about AI and crypto. But before we do, we want to thank the sponsors that made this possible, including our recommended exchange for 2023, Kraken. Go set up an account, check them out.

Bankless Nation, Crypto and AI, what is the intersection? We're going to explore these topics with our guests today. We have Mohammed, who is a contributor at Alliance Dow. He's a venture partner at Volt Capital. We also have Chow, who's a partner at Alliance Dow, an investor as well. Chow Mohammed, welcome to Bankless. Thanks for joining us today.

Thanks for having us.

Yes, thanks for having us. It was a pleasure to be here.

Yeah, it's great to have you guys. I know we've been wanting to do a podcast with you for a while. And uh this this topic really just came to mind because you guys wrote an excellent post here recently called The Convergence of AI in Web3: The Opportunities and Challenges. And this was really an exploration of the ways in which uh AI might find itself in Web3. There's kind of the intersection type point because there's all of these opportunities in AI, of course, and we know about all of these opportunities in crypto. But what I really liked about this post is you started to focus on some of the intersection type points. And um I think that is uh what the bankless community wants to hear. We've been talking a lot about AI and how it could come kill us and how we need to make sure that we're aligned. Um, can crypto help with any of the upcoming problems with AI? And so that's what uh we're we're gonna start with here today. Maybe before we begin, could you give us like kind of a preamble of thoughts? So when I say chow, crypto and AI.

Um, what do you think? Do you think that there's a large intersection here, or are these two totally separate uh technologies at just the highest level? Like what's going on in your brain with these two uh interrelated terms?

I think there are

two sides of the same coin.

You know, obviously in the past, uh you have memes like created by Peter Thiel that um uh AI is this centralizing force and uh blockchain crypto is this decentralizing force. So it sounds like

they're incompatible with each other.

But the fact of the matter is,

I think that blockchains provide a very good interface for AI to participate and to really flourish. Because

If you think about what was happening today in Web 2 and the traditional games, everyone is very

allergic to bots, to AI. Like bots get deplatformed left and right by social media, for example.

But to me, there's a difference between being a bot and being spammy.

And we're in an era where

the LLMs are so good that they're no longer have to be spammy. They can produce really insightful content.

And in order for those LLMs to flourish, they need a permissionless system,

a permissionless platform that they can build on top of, and that's blockchains.

So that's one area of intersection.

The other one is decentralized compute.

How do we

build models in a way that they're not controlled by a central powerful corporation? Right. So it's for the exact same reason why we want decentralized money, we want decentralized finance, we want decentralized social network.

That we may want decentralized AI, right? Decentralized ways to train and to for training and for inference of AI.

So we can dive deeper into that area as well.

Uh um I want to get Mohammed to weigh on this, but but Chow, you you brought up with something that's core because that has been, you're right, that has been a meme in my mind, this Peter Thiel thing of AI is a centralizing force and crypto is a decentralizing force. And these are kind of two opposing forces. And I think the central idea is AI needs to be centralized because it needs to consume this very large aggregate data set. And so something like Massive Economy.

Yeah, it gets better. The more data, the more humans you throw at it, the more kind of like um like feedback it receives from all of the humans in its large data set, right? So it's centralizing. Whereas crypto, as we know, is a very decentralized uh technology. Everyone, every individual can be their own bank. You can hold your own private keys and no one can take them from you, right? Um, you know, so that is a decentralizing force. But you I I don't think I get the sense that you don't actually agree with that that split. Maybe there's the the idea of we could we could have a decentralized AI. Like, so to talk to me about that. What do you disagree with? Um, Peter Thiel's meme.

So there's a part, part of me agrees with it, which is that

blockchains provide checks and balances to AI.

And so does zero knowledge proofs, which Mohammed is very familiar with. So we can talk about that. The intersection of blockchain, um, ZKP and AI, that's super fascinating. But the part of me that disagrees with Peter Thiel's

Mean is that

I think

decentralized compute is gonna play

a

somewhat

important role. I don't wanna

overblow it because again, this is one area where Mohammed and I actually disagree with each other. So Mohammed actually is strongly against decentralized compute,

and I can see some merit with it.

I think that decentralized compute can be useful for training

AI models, especially the smaller models. It's not good for large models. Large models need a centralized AWS or whatever to train the models. Okay.

And then for inference,

I think that there's a different way to do decentralized AI. It's not about running the models across a cluster of

nodes that interact with each other through the network.

It's more about

uh I think the best way to achieve decentralization on the inference side of things

is to run open source models on your local device.

So um

this is an area where we can dive deeper if we want.

The way I understand Peter Till's uh metaphor that AI is centralizing and crypto is decentralizing is less is less that AI and crypto are oil and waters, just more about the power structures, where AI and the power that AI creates benefits large centralized institutions, whereas cryptography and crypto economic systems largely benefit the individual. So, Mohammed, similar question to you, but also can you talk about just what you see when you see the intersection of AI and Web3 and also how it shifts the power pendulum of the world?

Yeah, um, I come from a different like thesis, like uh like AI started way before crypto. So like uh like AI roots come back to the 1960s and 1970s.

And the idea was different and the goals were different. And then crypto came in like 2010 after Bitcoin.

So they came as two independent technologies,

uh, but