2024 Encryption AI Sector Review and Outlook

In 2024, the encryption AI field achieved breakthrough growth, evolving from just a few projects at the beginning of the year to now becoming an independent track in the encryption market. Data shows that by early December, the total market capitalization of the encryption AI sector surpassed $70 billion, accounting for as much as 2% of the entire encryption market, with an annual growth rate of up to 400%.

Currently, the number of encryption AI projects has exceeded 600, covering multiple categories such as decentralized AI infrastructure and AI applications. Looking back at 2024, the narrative of encryption AI has undergone several significant changes. At the beginning of the year, OpenAI's Sora project sparked a wave of interest in decentralized AI infrastructure. Subsequently, NVIDIA's annual AI conference brought decentralized GPUs into the market spotlight. Mid-year, the encryption AI sector experienced an investment boom, with numerous projects receiving funding support. By the end of the year, the explosion of the AI Agent concept pushed the narrative of encryption AI to a new climax.

Encryption AI total market value突破700亿美元

As of December 23, the total market capitalization of the encryption AI sector reached $47 billion, with a 24-hour trading volume of $5 billion. Compared to the total market capitalization of $17 billion at the beginning of the year, this sector has achieved an increase of over 400% in less than a year.

Industry experts predict that with the evolution of the market cycle and the development of AI infrastructure and AI Agents, the market capitalization of this sector is expected to achieve a tenfold increase. Although the overall cryptocurrency market is currently declining, the market capitalization of encryption AI assets still accounts for nearly 1.4% of the entire market, demonstrating enormous potential.

2024 is a key year for the encryption AI field, transitioning from its infancy to a full-blown explosion. At the beginning of the year, there were only a few projects, such as Render, Fetch.ai, and WorldCoin. Now it covers multiple sub-tracks including decentralized GPUs, AI data platforms, AI infrastructure, and AI Agents, with the number of projects surging to over 600.

2024 Encryption AI Development Catalyst

The total market value of encryption AI assets in 2024 shows two significant peaks: in February-March and after October.

The growth in February to March was mainly benefited by two major events:

1. OpenAI released the "text-to-video" large model Sora, which drove the price increase of related projects such as Worldcoin's token WLD.
2. The annual AI conference GTC held by Nvidia has triggered a surge in GPU chip speculation, leading to the emergence of concepts such as decentralized GPUs.

The growth after October is attributed to the explosion of the AI Agent concept. The AI Agent project Truth Terminal's token GOAT has triggered a surge of related projects issuing tokens. As of December 23, the total market capitalization of AI Agent sector tokens has reached 9.8 billion USD, accounting for approximately 20% of the total market capitalization of the entire encryption AI sector.

In addition, the encryption AI market in 2024 has ushered in an unprecedented wave of investment. Top institutions such as Grayscale, Delphi Venture, Coinbase Ventures, Binance Labs, and a16z are all making moves. According to reports, in the third quarter of 2024, encryption venture capital injected over $213 million into AI projects, a quarter-on-quarter increase of 250% and a year-on-year increase of 340%.

Encryption AI Product Forms

The current encryption AI products are mainly divided into two categories: "AI for Crypto" and "Crypto for AI".

"AI for Crypto" focuses on applying AI technology to encryption products, such as AI code optimization and security auditing, on-chain yield strategy formulation, integration of AI chatbots, and more.

"Crypto for AI" empowers the AI industry using encryption technology, such as addressing privacy and security issues in AI model data processing, achieving decentralized model ownership through model assetization, and aggregating computing resources to reduce AI training costs.

It is widely believed in the industry that "Crypto for AI" shows broader prospects in terms of market application.

encryption AI ecosystem

Around the three elements of "data, computing power, and algorithms", the encryption AI ecosystem has begun to take shape:

1. Data layer: includes data collection, storage, and processing. Projects like Grass, Sahara AI, etc. obtain data through incentive mechanisms; Fraction AI, Alaya AI, etc. provide data labeling services; Filecoin, Arweave, etc. offer data storage solutions.

2. Computing Power Aspect: Decentralized GPU computing networks such as Akash, Render, io.net, etc., allow users to contribute GPU computing power to earn rewards; Exabits, GAIB, etc., tokenize physical GPUs.

3. Algorithm model level: Decentralized AI algorithm networks such as Bittensor and Pond aggregate various AI models to provide services for users.

2025 Encryption AI Outlook

1. Products related to AI Agents are expected to experience explosive growth, such as infrastructure projects specifically designed for AI Agents like Talus Network.

2. The external AI sector continues to heat up, with xAI completing a new funding round of $6 billion, reaching a valuation of $40 billion.

3. OpenAI plans to launch its AI Agent product "Operator" in January 2025, which is expected to reignite the AI market.

4. NVIDIA will hold its annual AI summit in March 2025, which may become the focus of the industry.

5. In terms of policy, the new White House head of artificial intelligence and encryption affairs in the United States has dual industry experience, which may drive the formulation of related policies.

Overall, the encryption AI sector is expected to continue its strong growth momentum in 2025, becoming one of the important driving forces in the encryption market.