The intersection of cryptocurrencies and artificial intelligence (AI) has entered a quieter and more selective phase, according to two prominent venture capitalists.
Canonical Crypto’s Anand Iyer and Spartan Group’s Kelvin Koh described the current climate as a post-explosion moment for decentralized AI protocols, with capital and talent moving toward more focused, utility-driven applications during the Hong Kong Consensus 2026.
“I think we’re at the bottom right now,” said Iyer, whose San Francisco-based company supports early-stage infrastructure and applications built on decentralized networks. “We went through a frothy period. Now it’s about finding out where the real strength lies.”
Both Iyer and Koh criticized what they see as overinvestment in GPU markets and attempts to build decentralized alternatives to big AI models like those from OpenAI or Anthropic. The capital required, Koh noted, is “night and day” compared to what is available in cryptocurrencies.
Instead, they see potential in purpose-built end-to-end solutions, tools that start with a specific problem and build up to the model, compute, and data layers.
Iyer noted that startups are skipping expensive SaaS tools and using AI to build custom internal systems in a matter of days. “Speculation will no longer drive product,” he said. “First we have to think about the users.”
Both investors emphasized the importance of proprietary data, regulatory advantages or go-to-market advantages as new forms of competitive moats.
For founders looking to raise capital, Koh offered some blunt advice: “Twelve months ago, it was enough to have a wrapper on ChatGPT. That’s no longer true.”
