If you've been on twitter over the past year you've seen every crypto enthusiast (🙋 guilty) make a hard pivot into Ai. Everything from content creators quickly spinning out TikToks to courses being sold for ChatGPT prompts.
While most of the startup funds still have crypto investments they pale in comparison to the recent Ai investments.
VCs have shown a significant shift in their investment strategies for Q2 2023. They brought in a massive $20.2 billion into the AI industry, dwarfing the $2.2 billion invested in cryptocurrency start-ups during the same period.
That us more that than ten times the investment received by the crypto industry.
On the flip side, the cryptocurrency sector suffered a blow as it slipped below its 2020 investment levels.
Check out our list of the Top AI investments in Q2:
The declining interest in cryptocurrency start-ups can be attributed to multiple factors. The industry has recently been plagued by a series of bankruptcies, increasing regulatory scrutiny, and a significant drop in prices, all of which have hurt investors' interest.
On the contrary, the AI industry has seen a surge in investor confidence, mainly due to its expansive range of use cases, offering considerable potential for various sectors.
AI is an enabling technology wave and it's shifting every category that we invest in. - Saam Motamedi - General Partner - Greylock Partners
This shift in the investment landscape has had a noticeable effect on crypto-centric venture capital firms such as Paradigm and Millennia Capital. Notably, they are now pivoting entirely towards the AI sector, highlighting the growing enthusiasm for AI over crypto in the venture capital world.
According to PitchBook's research, venture capitalists' expenditure on cryptocurrency and digital asset firms in the recent quarter dipped to its lowest point since 2020.
In contrast, the global investment value pumped into the AI industry for the same quarter, specifically from Q2 (April to June) surpassed that of the crypto sector.
This investment trend points to a marked shift in investment strategies as industry players pivot from the uncertain and turbulent crypto market towards the more promising AI sector.