Author: TinTinLand

In the past year, a significant change has occurred in the global venture capital market: capital is flowing into AI at an unprecedented rate, while investment in the cryptocurrency industry has clearly slowed down.

Let's look at two sets of data:

• On one side is the cryptocurrency market: the total number of global crypto VC investments is expected to plummet from about 2,900 in 2025 to 1,200, a drop of over 60%.

• On the other side is the AI market: according to OECD data, global VC investment in AI is projected to reach $258.7 billion by 2025, accounting for 61% of total global venture capital, up from only 30% in 2022.

This structural pressure is prompting some long-established crypto VCs to quietly adjust their course and start deploying capital into the AI sector.

On February 28, industry media reported that top crypto VC Paradigm is raising a new fund of up to $1.5 billion, with investment directions extending beyond the crypto space to include artificial intelligence, robotics, and other frontier technologies.

Are VCs really abandoning crypto and shifting to AI?

A detailed analysis shows that most leading crypto VCs are not simply shifting to AI, but are looking for new opportunities arising from the intersection of AI and Crypto. AI needs computing power, data, identity, and payment infrastructure, which are precisely areas where blockchain excels.

TinTinLand has compiled a list of 6 representative institutions to see which AI projects they specifically bet on over the past year.

1️⃣ Paradigm: $1.5 Billion New Fund Bets on AI

Since its establishment in 2018, Paradigm has been known for its research-driven investment style, with classic successes like Uniswap, Coinbase, and dYdX.

As early as 2023, Paradigm briefly removed references to "Web3" from its official website, sparking market speculation about a potential strategic transformation.

In response to external doubts that "Paradigm is abandoning crypto," co-founder Matt Huang explicitly stated, "We have never been so excited about crypto and continue to invest at all stages," while also emphasizing, "AI’s progress is too interesting to ignore. We do not believe Crypto and AI are zero-sum competitors; there is a lot of overlap between the two."

Recent Representative Deployments by Paradigm

? Nous Research (April 2025)

The decentralized AI startup Nous Research completed a $50 million Series A financing in April 2025, with Paradigm leading the round and the project's valuation reaching $1 billion.

The company is committed to developing and training open large language models, contrasting sharply with the closed models of centralized giant labs.

? EVMbench (February 2026)

In early 2026, Paradigm and OpenAI jointly launched EVMbench.

This is a benchmarking tool used to assess the capabilities of AI models in the field of smart contract security auditing, providing a technical foundation for future AI automated auditing tools.

? $1.5 Billion New Fund (February 2026)

According to several industry media reports, Paradigm is raising a new fund with a target size of up to $1.5 billion, extending its investment scope to AI, robotics, and other frontier technology fields.

The fund will still be led by Paradigm's existing research and engineering team, meaning that its AI investment path will continue in its usual style: prioritizing underlying technologies and infrastructure.

2️⃣ a16z: AI + Crypto Dual Strategy

Founded in 2009, Andreessen Horowitz (a16z) is one of the most influential VCs in Silicon Valley, establishing the a16z crypto fund in 2018 to systematically layout blockchain infrastructure and DeFi. With the explosion of generative AI, a16z quickly opened a second front.

At the beginning of 2026, a16z announced the completion of over $15 billion in new fundraising, of which approximately $1.7 billion is dedicated to AI infrastructure investment.

Several a16z crypto partners have publicly stated that 2026 will be an important year for AI Agents to transition from prototype stage to actual application pilots. There are natural intersections between AI and crypto networks in identity, payment, and incentive mechanisms, which may lead to new directions for technological integration in the future.

Recent Representative Investments by a16z

? Thinking Machines Lab (June 2025)

In 2025, the AI startup Thinking Machines Lab, founded by former OpenAI CTO Mira Murati, announced the completion of a $2 billion seed round financing, achieving a post-investment 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 and more versatile generative AI systems and has attracted researchers from institutions like OpenAI and Meta.

? Cursor (2024-2025)

The AI programming assistant Cursor received multiple rounds of investment from a16z between 2024 and 2025, and its valuation reached $29.3 billion after the D round financing in November 2025.

Cursor is currently one of the fastest-growing AI development tools. It enables developers to complete complex tasks such as code generation, debugging, and refactoring through natural language by deeply integrating large language models. According to several industry media reports, Cursor's annual recurring revenue (ARR) has surpassed $2 billion.

? Catena Labs (May 2025)

Catena Labs, founded by Sean Neville, co-founder of Circle and inventor of USDC, is dedicated to building financial infrastructure tailored for AI Agents, including smart payments, identity verification, and low-cost settlements.

In 2025, the project completed a $18 million seed round financing, led by a16z crypto, with participation from institutions like Coinbase Ventures.

3️⃣ Polychain: Focus on AI Trust and Identity Layer

Founded in 2016, Polychain Capital was established by former Coinbase employee Olaf Carlson-Wee and has positioned itself as a crypto-native investment institution since its inception.

Polychain has not explicitly stated a "shift from Crypto to AI"; rather, its investment logic is more closely aligned with viewing AI as a new layer of infrastructure opportunity for blockchain.

According to Polychain, the core bottlenecks of AI, such as computing power, data, and incentive mechanisms, are precisely the issues that blockchain excels at solving.

Recent Representative Investments by Polychain Capital

? Billions Network (August 2025)

Billions Network is a project that combines AI, privacy computing, and zero-knowledge proofs as an identity infrastructure project, allowing users to complete identity verification without disclosing personal data and providing a trusted identity layer for AI systems.

In August 2025, the project announced the completion of approximately $30 million in financing, with investors including Polychain Capital.

? Talus Labs (2024-2025)

In September 2025, Talus Labs completed $10 million in financing, led by Polychain Capital, marking Polychain's third investment in the project.

Talus Labs proposed the concept of PredictionAI: combining AI Agents with on-chain prediction markets to allow AI models to compete, predict, and make decisions in a transparent and verifiable environment.

? Grass (2025)

Grass is a data network project aimed at AI models. Grass allows users to contribute bandwidth and network data resources through the DePIN model, using this data for AI model training.

In 2025, Grass completed approximately $10 million in financing, with investors including Polychain Capital. This is also Polychain's third investment in the project.

4️⃣ Pantera Capital: Increasing Investment in DePIN and Decentralized Computing Power

Pantera Capital was founded in 2003, initially as a global macro hedge fund. It fully transitioned to cryptocurrency asset investments in 2013 and was an early supporter of projects like Circle, Coinbase, and Ripple.

Pantera Capital's AI investment logic stems from several core judgments: AI requires new computing and data infrastructure; Web3 can provide decentralized computing power and data networks; DePIN + AI will become a new layer of infrastructure.

Recent Representative Investments by Pantera Capital

? Gradient Network (June 2025)

Gradient Network is a decentralized AI inference network aimed at utilizing idle computing power from personal computers and mobile devices to provide distributed inference capabilities for AI models, thereby reducing the costs of AI computations.

In 2025, Gradient Network completed $10 million in seed financing, led by Pantera Capital and Multicoin Capital. The project is seen as an important exploration in the DePIN × AI infrastructure sector.

? Based (February 2026)

Based is a Web3 super app that integrates trading, payment, and social functions, incorporating AI Agents as the main interaction method for on-chain operations, allowing users to automatically execute transactions and manage assets through AI.

In early 2026, Based completed approximately $11.5 million in financing, led by Pantera Capital, with participation from Coinbase Ventures.

5️⃣ 1kx: Betting on the Era of Agent Internet

Founded in 2018, 1kx is headquartered in Berlin and is an early supporter of projects such as Lido, Arweave, and Gitcoin, establishing significant influence in the DeFi and decentralized infrastructure sectors.

1kx's core judgment is that the internet is entering the "Agent Internet" era, where a large number of AI Agents will execute tasks, trade, and collaborate on behalf of users, with Web3 infrastructure being the key supporting layer for this transition.

Recent Representative Investments by 1kx

? Olas (February 2025)

Olas (formerly Autonolas) is a decentralized AI Agent network that allows developers to create and deploy autonomously operating AI agents, enabling multiple agents to cooperate to complete tasks through on-chain incentive mechanisms.

In February 2025, Olas completed a $13.8 million financing round led by 1kx. The project plans to launch an AI Agent app store named Pearl, allowing users to own and control their AI agents on-chain for automatic trading, social media operation, and other scenarios.

? Camp Network (April 2025)

As generative AI models increasingly utilize internet content for training, copyright disputes between content creators and AI companies are on the rise. Camp Network aims to build an on-chain storage and licensing platform for content creators, exploring new business models for entertainment and IP assets in the AI era.

The project completed a $25 million Series A financing co-led by 1kx and Blockchain Capital in 2025.

6️⃣ YZi Labs: Investing in AI Applications and Product Innovation

YZi Labs originally belonged to Binance Labs and officially became independent from the Binance brand in 2025, clearly listing Web3, AI, and biotechnology as its three new investment directions.

In October 2025, YZi Labs announced the launch of a BNB Builder Fund of approximately $1 billion to support emerging projects including AI, RWA, DeFi, and infrastructure.

Compared to some crypto VCs focused on underlying technologies, YZi Labs' AI investment strategy is more application-oriented.

Recent AI Investment Cases by YZi Labs

? VideoTutor (October 2025)

VideoTutor is an education AI Agent for K12 that can automatically generate animated teaching videos based on user questions and use voice and visualization to explain 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 financing for the project. The product attracted 20,000 users and generated 20,000 teaching videos within 10 days of launch.

? USD.AI (August 2025)

In August 2025, YZi Labs announced a strategic investment in USD.AI. USD.AI is an AI infrastructure financial protocol that allows GPU or AI server operators to obtain loans by collateralizing hardware and issue stablecoins tied to computing resources, thereby providing funding for AI computing infrastructure.

? Conclusion: Which AI Tracks Do Crypto VCs Prefer?

Overall, the primary areas of interest for crypto VCs in AI investments currently focus on the following directions:

① Decentralized AI Infrastructure

This is the most favored track, with representative projects including Nous Research, Gradient Network, Grass, and others.

The core logic is that the costs of training and inference for AI models are extremely high, and coordinating idle GPUs globally through blockchain incentive mechanisms may build a cheaper and more decentralized solution.

② AI Agent Payments and Finance

Projects like Catena Labs and Olas represent this mainline.

As AI Agents begin to automatically execute tasks and transactions, the need for self-sovereign identity, automated settlement, and on-chain payments has become urgent. The slow, high-threshold, and compliance-heavy traditional financial system is very unfriendly to AI Agents, indicating a real gap in infrastructure.

③ AI Identity and Trust Layer

Representative project: Billions Network.

In an online environment where AI-generated content is rampant and bots are prevalent, "proving you are human" is becoming a key demand. The combination of zero-knowledge proofs and on-chain identity mechanisms provides a solution for identity verification without disclosing data.

④ AI × IP Copyright Confirmation

Representative project: Camp Network.

As generative AI develops, the origin and copyright issues of training data are becoming increasingly important, and blockchain provides a traceable and enforceable mechanism for copyright registration and sharing.

⑤ AI Application Layer

Some crypto VCs have also directly invested in AI products aimed at end users, such as Cursor and VideoTutor— not emphasizing Web3 attributes, but directly using AI to lower service thresholds and expand inclusive boundaries.

? Final Thoughts

AI Agents need to make autonomous payments, computing power needs to be coordinated in a decentralized manner, identities need to be verified on-chain, and copyright needs to be traceable and confirmed— these demands are not a narrative created by Web3 itself, but are gaps in infrastructure inevitably brought about by the development of AI.

Crypto VCs have not truly "abandoned" Web3. The shift of crypto VCs to AI is a bet on its next explosive growth point.

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