$28 million. In charge of that Blockchain Builders Fund is Steven Willinger, who came over from Coinbase Ventures recently to head it up. He’s wagering on the exhilarating collision of Web3 and AI. A huge number, no doubt. But perhaps this time it’s genuinely visionary, and not another instance of crypto-fueled exuberance leading investors to throw caution to the wind.

Let's be real: the AI hype is deafening right now. Now everyone’s trying to scramble to shoehorn it into anything they can, and blockchain is no different. On paper, Willinger’s holistic vision of “AI for Blockchain” and “Blockchain for AI” is an exciting prospect. Specifically, AI has the potential to improve the auditability of smart contracts. Blockchain technology has potential to serve as a transparent and decentralized repository of secure trained models or training data for AI models. Or are these solutions looking for a problem?

While Almanax’s use of LLMs to discover vulnerabilities in smart contracts is exciting, is this approach superior to current, tried-and-true auditing practices? And unless so, does it really warrant the computational complexity and possible mistakes introduced with the application of AI? I'm skeptical.

“Blockchain for AI” seems compelling, intoxicating even. The idea of using crypto incentives to source training data, as PublicAI and others are doing, addresses a real problem: the need for diverse and unbiased datasets. Are these alternative platforms truly scalable at the level or cost-effective utility of these centralized data providers? Not to mention the legislative minefield of incentivizing data collection via cryptocurrency.

Are we seeing synergy or just two trendy technologies awkwardly dancing together?

Here's where things get interesting, and potentially…heated. While Willinger doesn’t come out and say so, his investment is a piece of the larger geopolitical chessboard of AI dominance. The US and China are deeply engaged in a tech cold war, and AI is one of the most important frontlines. With its ability to decentralize power and restore data sovereignty, blockchain could be an important weapon in our arsenal.

Think about it: if the US fosters innovation in decentralized AI infrastructure through funds like Willinger's, it could create an alternative to the centralized, often government-controlled AI ecosystems in countries like China. Far from being a technology issue alone, this is a debate over values, control, our place in the world—and yes—our technological supremacy. The stakes are high.

Despite all its progress, the US is far behind China in terms of blockchain adoption. Whether it was supply chain management, cross-border payments, or building an entire digital currency infrastructure, China has long been on the offense promoting blockchain-based solutions. The US is behind, and PropTech investments like Willinger’s are incredibly promising for making those strides in the right direction.

Let's not forget the elephant in the room. Web3 is still a wild west. Regulatory uncertainty, scalability challenges, and a bad reputation that still stems from the Ponzi schemes of yore still haunt the industry. And the last question, perhaps most important, is whether $28 million is enough to really make an impact. Or will it simply disappear into the unforgiving abyss of crypto winter?

The answer, quite honestly, is it depends entirely on where that money is spent. Willinger’s initial focus on delivering strategic guidance and GTM support makes a lot of sense. And again, most crypto startups today don’t fail due to bad technology, but rather lackluster execution. No amount of expert advice can fix what’s fundamentally wrong with the market.

Instead, too many in the space are obsessed with the short-term fundraising and vanity metrics. This misguided approach jeopardizes their hard work in creating real traction and revenue.

Willinger's $28 million gamble could pay off. He and the entrepreneurs he mentors need to keep their focus on creating real answers to real challenges. They need to expertly walk the regulatory tightrope and avoid the siren call of glitz and glamour of hype and speculation.

Together, AI and Blockchain can do wonderful things beyond our present ability to even conceptualize. That’s no sure fire slam dunk. That takes realistic expectations, rigorous execution, and a healthy dose of skepticism. So, is it a boom or bust? The jury is still out. Place your bets carefully.

Many in the space are prioritizing fundraising and vanity metrics over generating traction and revenue, which is a recipe for disaster.

What's Next? A Realistic Forecast

Over the next 3-5 years, I expect to see:

  • Continued experimentation: Many AI-Blockchain projects will launch, most will fail, but a few will find genuine product-market fit.
  • Regulatory scrutiny: Governments will start to crack down on the use of blockchain for AI, particularly in areas like data privacy and security.
  • Increased focus on enterprise adoption: The real money will be in applying AI-Blockchain solutions to real-world business problems, not speculative crypto projects.
  • Geopolitical competition: The US and China will continue to compete for dominance in AI and blockchain, with significant implications for the global economy.

The Verdict: Cautiously Optimistic

Willinger's $28 million gamble could pay off. But only if he and the startups he backs focus on building real solutions to real problems, navigate the regulatory minefield, and avoid the siren song of hype and speculation.

The convergence of AI and Blockchain has enormous potential, but it's not a guaranteed slam dunk. It requires realistic expectations, rigorous execution, and a healthy dose of skepticism. So, is it a boom or bust? The jury is still out. Place your bets carefully.