Breakthrough rise in the field of encryption AI in 2024, with the number of related projects exceeding 600.

In 2024, the encryption AI field is experiencing an unprecedented explosive rise. In just one year, this field has developed from only a few projects to becoming an independent track in the encryption market that cannot be ignored.

Latest data shows that on December 7th, the total market value of the encryption AI sector surpassed $70 billion, accounting for the highest share of 2% in the entire encryption market, with an annual rise rate of up to 400%. Meanwhile, the number of encryption AI projects has also seen explosive growth, currently exceeding 600, covering various categories including decentralized AI infrastructure and AI applications.

Looking back at 2024, the narrative of encryption AI has experienced several major changes. At the beginning of the year, a well-known AI company's video generation project sparked a hype around encryption AI infrastructure. Subsequently, a prominent chip company's annual AI conference brought decentralized GPUs to the market's attention. Mid-year, the encryption AI sector saw a surge in investment, with numerous venture capital firms actively investing, driving the research and application of related technologies. By the end of the year, the explosion of the AI Agent concept further elevated the narrative of encryption AI to a new climax.

The total market value of encryption AI assets has surpassed 70 billion USD this year.

According to the latest data from a certain encryption data platform, the number of Tokens included in the encryption artificial intelligence sector has reached 355, with a total market value exceeding 70 billion USD on December 7, peaking at 70.42 billion USD. As of December 23, affected by the overall market pullback, the total market value of the encryption AI sector has fallen back to 47 billion USD, with a 24-hour trading volume still reaching 5 billion USD.

At the beginning of the year, the total market value of the encryption AI sector was only 17 billion dollars. In less than a year, the sector achieved a rise of over 400%, demonstrating tremendous development potential.

A co-founder of a certain capital institution stated on December 12 that, although the current encryption AI sector accounts for only about 1% of the total market value of the encryption market, it is expected that the sector's market value will achieve a tenfold rise with the evolution of the market cycle and the strong momentum of AI infrastructure and Agents.

It is worth noting that on December 23, the total market capitalization of the entire encryption market reached $3.4 trillion, with the market share of encryption AI assets still accounting for nearly 1.4%, further demonstrating its future rise potential.

2024 is a critical year for the rise of the encryption AI field from its infancy to full-scale explosion. At the beginning of the year, there were only a handful of projects in this sector, mainly represented by decentralized GPU projects and AI infrastructure. Now, it has branched into multiple sub-sectors, covering decentralized GPU, AI data platforms, AI infrastructure, and AI Agents, with the number of projects surging to hundreds.

A certain encryption data platform shows that the number of encryption projects containing AI entries has exceeded 600, and this number is still continuing to rise.

2024 Encryption AI Catalyst: External Narratives, Venture Capital Layouts, and AI Agent Concept Explosion

From the trend of the total market value of encryption AI assets, there are two obvious peaks in 2024: the first appears during the period of February to March, and the second occurs after October, ushering in stronger rise.

The rise during the period of February to March was mainly due to the stimulation of two landmark events in the AI field. In February, a well-known AI company released a groundbreaking video generation model, causing a transformation in the AI sector and driving the prices of related encryption projects to surge. In March, an annual AI conference hosted by a chip giant again drew global attention, pushing its market value to climb and sparking a frenzy around GPU chips. These events injected new vitality into the encryption AI field, leading to the emergence of concept projects like decentralized GPUs springing up like mushrooms after rain.

Since then, encryption AI has officially developed into an independent track, with projects such as AI infrastructure, decentralized GPUs, and decentralized AI data emerging one after another, bringing more opportunities to the market.

The rise in October was mainly attributed to the explosive emergence of the AI Agent concept. The sudden launch of a certain AI Agent project token triggered a frenzy of speculation on related project tokens. This trend led to the rapid rise of AI Agents, growing into an independent sub-sector within the encryption AI field, with products covering AI Agent tokens, issuance platforms, and underlying infrastructure, among others. As of December 23, the total market capitalization of AI Agent sector tokens had reached $9.8 billion, accounting for approximately 20% of the total market capitalization of all encryption AI sector projects, and the enthusiasm continues.

In addition to external events driving the market, the crypto AI market in 2024 is also experiencing an unprecedented investment boom. Several top venture capital firms are actively laying out "crypto + AI" projects, with a well-known firm indicating early in the year that it sees potential in this field and has invested in multiple projects. Another large institution raised a new fund of $6 billion, focusing on investing in AI. In the second half of the year, more institutions announced their entry into the crypto AI field, establishing dedicated funds or increasing their investments. According to reports, in the third quarter of 2024, crypto venture capital injected over $213 million into AI projects, a month-on-month rise of 250%, and a year-on-year increase of as much as 340%.

"Encryption Empowers AI" Market Prospects Are Promising

Currently, the AI products in the market can be mainly divided into "AI-enabled encryption" and "encryption-enabled AI."

"AI Empowered Encryption" focuses on applying AI technology to encryption products to enhance user experience or product performance. For example, using AI for code optimization and security auditing, participating in on-chain yield strategy formulation, and integrating AI chatbots, etc.

"Encryption empowers AI" utilizes encryption technology to empower the AI industry, leveraging the advantages of blockchain to address pain points in the AI field. For example, using blockchain technology to solve privacy and security issues in data processing for AI models, achieving decentralized ownership or use of AI models by the community through model assetization, and reducing AI model training costs by aggregating computing power resources with tokens.

Overall, the decentralized characteristics of Web3 technology, the Token economic system, and the advantages of smart contracts provide solutions to issues such as data opacity and unclear business models in the AI industry. This aligns with the concept of "AI improves production efficiency, and Web3 optimizes production relations."

Therefore, it is generally believed in the industry that "encryption empowering AI" presents a broader prospect at the application level compared to "AI empowering encryption." This trend has also prompted more and more professionals in the AI industry to seek to leverage encryption technology to break through industry bottlenecks.

Build an encryption AI ecosystem around the three elements of AI

Based on the three elements of "data, computing power, and algorithms" that drive the development of AI, the encryption AI ecosystem is gradually improving.

At the data level, encryption AI projects encompass data collection, storage, and processing. Some projects encourage users to share data through Token incentive mechanisms, or launch dedicated data markets. Decentralized data labeling platforms provide developers with high-quality training datasets. Certain storage solutions ensure data security and persistence.

At the computational level, decentralized GPU computing networks have emerged, allowing anyone to contribute idle GPU computing power to execute AI tasks and receive rewards. Some projects have even tokenized physical GPUs to promote the decentralization and liquidity of computing power.

At the algorithmic model level, the decentralized AI algorithm network becomes an intelligent marketplace connecting various AI models. Some projects gather and evaluate excellent models through subnetworks or competition points, and incentivize model contributors through tokenization.

It can be seen that the encryption market has built a thriving ecosystem around the three pillars of AI.

2025 Encryption AI Track Outlook

Since the AI Agent concept gained popularity in October, related products have become the new favorites in the market. Some projects are specifically designed to build frameworks and infrastructure for AI Agents. The market's focus has gradually shifted from the original infrastructure field to AI Agent applications.

Many institutions expressed optimism about the integration of encryption and AI in their 2025 outlook for the encryption industry, especially regarding AI Agent-related products.

The popularity of the external AI field continues to rise. A well-known entrepreneur's AI company has once again completed a $6 billion financing round, with its valuation soaring to $40 billion, further boosting the prosperity of the AI market.

On the narrative level, a well-known AI company is transitioning from language models to general artificial intelligence, planning to launch a new AI Agent product in January 2025. An annual AI summit by another chip giant will also take place in March, attracting significant attention.

At the policy level, the new president of the United States has announced the appointment of individuals with dual investment experience in encryption and AI to be responsible for related affairs, which is seen as likely to promote the integrated development of the two fields.

In summary, the encryption AI sector is expected to continue to thrive in 2025, driven by multiple favorable factors.