Author: TinTinLand
Over the past year, a clear shift has emerged in the global venture capital market: Capital is rushing into AI at an unprecedented pace, while investment in the crypto industry has noticeably slowed down.
Let’s look at two sets of data:
- On one side is the crypto market: the total number of global crypto VC investments in 2025 plummeted from about 2,900 deals to 1,200 deals, a decline of over 60%.
- On the other side is the AI market: according to OECD data, the global VC investment in AI reached $258.7 billion in 2025, accounting for 61% of total global VC funding, compared to just 30% in 2022.
This structural gap is prompting a number of established crypto VCs to quietly shift their focus, beginning to allocate capital to AI tracks.
On February 28, industry media reported that top crypto VC Paradigm is raising a new fund of up to $1.5 billion, with investment scope expanding beyond crypto into artificial intelligence, robotics, and other cutting-edge technologies.
Are VCs really abandoning crypto to switch to AI?
A closer analysis shows that most leading crypto VCs are not simply pivoting to AI, but are seeking new opportunities at the intersection of AI and Crypto. AI requires computing power, data, identity, and payment infrastructure—areas where blockchain excels.
TinTinLand has identified six representative institutions to see what specific AI projects they have bet on over the past year.
1️⃣ Paradigm: $1.5 Billion New Fund Bets on AI
Founded in 2018, Paradigm is known for its deep research-driven investment style, with notable achievements including Uniswap, Coinbase, and dYdX.
As early as 2023, Paradigm briefly removed references to “Web3” from its official website, sparking market speculation about a strategic shift.
In response to external doubts that “Paradigm is abandoning crypto,” co-founder Matt Huang clarified, “We’ve never been less excited about crypto; we continue to invest at all stages,” but also emphasized, “AI progress is too fascinating to ignore. We don’t see Crypto and AI as zero-sum; there’s significant overlap.”
Recent representative investments by Paradigm
🔹 Nous Research (April 2025)
Decentralized AI startup Nous Research completed a $50 million Series A funding round in 2025, led by Paradigm, with the project valued at $1 billion.
The company focuses on developing and training open large language models, contrasting sharply with the closed approaches of centralized giants’ labs.
🔹 EVMbench (February 2026)
In early 2026, Paradigm partnered with OpenAI to launch EVMbench.
This is a benchmark tool designed to evaluate AI models’ capabilities in smart contract security auditing, laying the technical foundation for future AI automation auditing tools.
🔹 $1.5 Billion New Fund (February 2026)
According to multiple industry reports, Paradigm is raising a new fund targeting up to $1.5 billion, expanding investments into AI, robotics, and other frontier tech fields.
This fund remains led by Paradigm’s existing research and engineering teams, indicating that its AI investment path will continue its usual focus: prioritizing foundational technologies and infrastructure.
2️⃣ a16z: Dual-Track Strategy in AI + Crypto
Founded in 2009, Andreessen Horowitz (a16z) is one of Silicon Valley’s most influential VCs. In 2018, it established a dedicated a16z crypto fund, systematically investing in blockchain infrastructure and DeFi. With the explosion of generative AI, a16z quickly opened a second front.
In early 2026, a16z announced the closing of a new fund exceeding $15 billion, with about $1.7 billion dedicated to AI infrastructure investments.
Several a16z crypto partners have publicly stated that 2026 will be a pivotal year for AI Agents moving from prototypes to real-world applications. AI and crypto networks share natural intersections in identity, payments, and incentive mechanisms, likely leading to new technological integrations in the future.
Recent representative investments by a16z
🔹 Thinking Machines Lab (June 2025)
In 2025, AI startup Thinking Machines Lab, founded by former OpenAI CTO Mira Murati, announced a $2 billion seed round, with a post-money valuation of $12 billion, led by a16z. This is one of the largest seed rounds in Silicon Valley history.
The company focuses on building safer, more general-purpose generative AI systems, attracting many researchers from OpenAI, Meta, and other institutions.
🔹 Cursor (2024-2025)
AI coding assistant Cursor received multiple investments from a16z during 2024-2025. After its Series D in November 2025, its valuation reached $29.3 billion.
Cursor is one of the fastest-growing AI development tools, deeply integrating large language models to enable developers to generate, debug, and refactor code via natural language. Industry reports indicate its annual recurring revenue (ARR) has surpassed $2 billion.
🔹 Catena Labs (May 2025)
Founded by Sean Neville, co-founder of Circle and inventor of USDC, Catena Labs aims to build tailored financial infrastructure for AI Agents, including smart payments, identity verification, and low-cost settlement.
In 2025, the project completed a $18 million seed round, led by a16z crypto, with participation from Coinbase Ventures and others.
3️⃣ Polychain: Focus on AI Trust and Identity Layer
Founded in 2016 by Olaf Carlson-Wee, a former Coinbase employee, Polychain Capital has positioned itself as a crypto-native investment firm from the start.
Polychain does not explicitly state “shifting from crypto to AI,” but its investment logic aligns more with viewing AI as a new foundational infrastructure layer for blockchain.
In Polychain’s view, core bottlenecks of AI—such as computing power, data, and incentives—are precisely areas where blockchain can provide solutions.
Recent representative investments by Polychain
🔹 Billions Network (August 2025)
Billions Network is an identity infrastructure project combining AI, privacy computing, and zero-knowledge proofs, enabling users to verify identities without revealing personal data, providing a trusted identity layer for AI systems.
In August 2025, the project announced a $30 million funding round, with Polychain Capital among the investors.
🔹 Talus Labs (2024-2025)
In September 2025, Talus Labs completed a $10 million funding round, led by Polychain Capital—its third investment in the project.
Talus Labs proposed PredictionAI, a concept that combines AI Agents with on-chain prediction markets, allowing AI models to compete, forecast, and make decisions in transparent, verifiable environments.
🔹 Grass (2025)
Grass is a data network project for AI models. Using DePIN (Decentralized Physical Infrastructure Networks), Grass enables users to contribute bandwidth and network data resources, which are then used for AI training.
In 2025, Grass raised about $10 million, with Polychain Capital among the investors—its third investment in this project.
4️⃣ Pantera Capital: Increasing Focus on DePIN and Decentralized Computing
Founded in 2003, Pantera Capital initially was a global macro hedge fund. In 2013, it shifted entirely to crypto assets, becoming an early supporter of projects like Circle, Coinbase, and Ripple.
Pantera’s AI investment logic is based on key judgments: AI requires new computing and data infrastructure; Web3 can provide decentralized compute and data networks; DePIN + AI will form a new infrastructure layer.
Recent representative investments by Pantera
🔹 Gradient Network (June 2025)
Gradient Network is a decentralized AI inference network aiming to leverage idle compute power from personal computers and mobile devices to provide distributed inference capabilities, reducing AI computation costs.
In 2025, Gradient Network completed a $10 million seed round, led by Pantera Capital and Multicoin Capital. The project is viewed as an important exploration at the intersection of DePIN and AI infrastructure.
🔹 Based (February 2026)
Based is a Web3 super app integrating trading, payments, and social features, with AI Agents as the primary on-chain interaction interface, enabling users to automate trading and asset management via AI.
In early 2026, Based raised approximately $11.5 million, led by Pantera Capital, with participation from Coinbase Ventures and others.
5️⃣ 1kx: Betting on the Agent Internet Era
Founded in 2018 and headquartered in Berlin, 1kx is an early supporter of projects like Lido, Arweave, and Gitcoin, with significant influence in DeFi and decentralized infrastructure.
1kx’s core belief: the internet is entering an “Agent Internet” era, where numerous AI Agents will act on behalf of users to perform tasks, trade, and collaborate, with Web3 infrastructure being the key support layer.
Recent representative investments by 1kx
🔹 Olas (February 2025)
Olas (formerly Autonolas) is a decentralized AI Agent network allowing developers to create and deploy autonomous AI agents, which collaborate via on-chain incentives.
In February 2025, Olas completed a $13.8 million funding round led by 1kx. The project plans to launch an AI Agent app store called Pearl, enabling users to own and control their AI agents for automated trading, social media, and more.
🔹 Camp Network (April 2025)
With the widespread use of generative AI models trained on internet content, copyright disputes between content creators and AI companies have increased. Camp Network aims to build an on-chain storage and licensing platform for creators, exploring new business models for entertainment and IP assets in the AI era.
In 2025, the project completed a $25 million Series A funding round jointly led by 1kx and Blockchain Capital.
6️⃣ YZi Labs: Investing in AI Applications and Product Innovation
Originally part of Binance Labs, YZi Labs became independent from Binance in 2025, explicitly listing Web3, AI, and biotech as its three main investment directions.
In October 2025, YZi Labs announced the launch of a $1 billion BNB Builder Fund to support emerging projects including AI, RWA, DeFi, and infrastructure.
Compared to some crypto VCs focused on foundational tech, YZi Labs’ AI investment approach is more application-oriented.
Recent YZi Labs AI investments include:
🔹 VideoTutor (October 2025)
VideoTutor is an educational AI Agent targeting K12, capable of automatically generating animated teaching videos from user questions, with voice and visual explanations of complex concepts. Its founder is a 20-year-old Chinese university student, Kai Zhao.
In October 2025, YZi Labs led a $11 million seed round. The product attracted 20,000 users and generated 20,000 educational videos within just 10 days of launch.
🔹 USD.AI (August 2025)
In August 2025, YZi Labs announced a strategic investment in USD.AI, an AI infrastructure financial protocol allowing GPU or AI server operators to obtain loans by collateralizing hardware and issuing stablecoins linked to computing resources, providing funding for AI compute capacity.
💡 Summary: Which AI Tracks Do Crypto VCs Favor?
Overall, the most favored AI investment tracks among crypto VCs currently include:
① Decentralized AI Infrastructure
This is the most popular track, with projects like Nous Research, Gradient Network, Grass, etc.
The core logic is: training and inference costs for AI models are extremely high, but by incentivizing global idle GPU resources via blockchain, a lower-cost, decentralized alternative can be built.
② AI Agent Payments and Finance
Projects like Catena Labs and Olas exemplify this track.
As AI Agents begin to autonomously execute tasks and trades, needs for self-sovereign identity, automatic settlement, and on-chain payments become urgent. Traditional financial systems’ slow speed and high barriers make them ill-suited for AI Agents, creating a real infrastructure gap.
③ AI Identity and Trust Layer
Representative project: Billions Network.
In an environment flooded with AI-generated content and bots, “proving you are human” is becoming a key requirement. Combining zero-knowledge proofs with on-chain identity mechanisms offers a way to verify identities without revealing data.
④ AI × IP Rights and Ownership
Representative project: Camp Network.
As generative AI develops, the sourcing and copyright issues of training data are increasingly important. Blockchain provides traceable, enforceable mechanisms for copyright registration and revenue sharing.
⑤ AI Application Layer
Some crypto VCs are directly betting on end-user AI products like Cursor and VideoTutor—focusing less on Web3 attributes and more on lowering service barriers and expanding inclusive access through AI.
🚩 Final Words
AI Agents need autonomous payments, computing power must be decentralized and coordinated, identities need on-chain verification, and copyrights require traceable rights confirmation—these are not narratives invented by Web3 but fundamental infrastructure gaps driven by AI’s development.
Crypto VCs are not truly “abandoning” Web3. Their shift into AI is a bet on its next explosive growth.
