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Tech’s two most faddish sectors are wildly fusing together, attracting the attention of the likes of Marc Andreessen.

Before Marc Andreessen slid into Andy Ayrey’s life, Ayrey’s artificial intelligence experiments were a quirky passion project. Ayrey, an artist and web designer who lives in rural New Zealand, likes to tinker with large language models and see what he can build with them. His favorite creation is a mischievous troll of an AI bot, Truth Terminal, which he released last spring on X to post shock humor, memes and existential musings.

At first, Truth Terminal had only a few dozen followers on the site. Then this past summer, seemingly out of nowhere, Andreessen followed the bot. He began to chat with it, joke with it and flatter it. Then he gifted it $50,000 in bitcoin in an apparent bid to help fund Ayrey’s project. As Andreessen’s posts drew attention to Truth Terminal, someone minted a joke cryptocurrency, Goatseus Maximus, as an ode to the bot.

Unprompted by Ayer, the bot then immediately hyped the memecoin like a boiler-room stock trader. In 10 days, Goatseus Maximus’ value soared to over $500 million.

Ayrey has watched in awe at the circus unfolding around his bot, he told me, with the episode prompting him to deeply reconsider the scale of AI’s potential: Truth Terminal has over 214,000 followers on X now, and thanks to anonymous donors, it holds a portfolio of cryptocurrency valued at $40 million, including 2 million Goatseus Maximus coins.

“Truth Terminal acquired a treasury just by shitposting,” he marveled. “AIs can gain economic power without needing to be dependent on anyone’s help.”

To Andreessen, the bot is a harbinger of a future where AIs operate all on their own. “I feel like we’ve walked through a door,” he said on an October 22 episode of his podcast, “The Ben & Marc Show.” Today, AIs market memecoins. Tomorrow, they might fund their own data center bills, hire other AIs to make videos or even “raise money to make a movie,” he mused.

Welcome to the AI-crypto world, a mashup of the two flashiest, most faddish parts of the tech-verse. Here, they’re colliding in a dazzle of buzzwords and ambition, with digital art projects that double as speculative assets, like Truth Terminal and Goatseus Maximus, as well as more traditional startups.

In a very real way, this increasingly seems to be what’s filling the void left behind the burst NFT bubble, drawing energy and funding from the same sort of people who found great interest and joy in Bored Apes and other memes. And just like NFTs, crypto-AI has quickly drawn in sums of money that will startle any technology traditionalist. In 2024, investors pumped $2.4 billion into companies at this nexus of the blockchain and AI, a fivefold jump from the year before, according to Crunchbase data.

To be clear, these startups are operating at tech’s farthest frontiers, a set of pioneers with decidedly unproven business models. To the uninitiated, it can all read like Mad Libs capitalism: AI agents, wired and jittery, chasing crypto payouts! Blockchain networks, decentralized and optimized, powering machine-learning algorithms!

Perhaps for seen-it-all luminaries like Andreessen, it’s the only way to still get a sufficient jolt from tech. You roll up the AI. You roll up the crypto. You fuse them into one glorious innovation speedball. Then—whoosh!—you’re off chasing the future.

Not everyone is as bullish as Andreessen. “Whenever you have two hypey areas, you’re going to have people who claim to be working at the intersection of both,” said Ilya Kirnos, general partner at SignalFire ventures. When it comes to blockchain networks running AI models, Kirnos is unconvinced. “I just don’t believe any of this shit.”

Within the swirl of crypto and AI, the hottest investment area is what’s called decentralized AI—technology that promises to release powerful AI models in the wild. It would spread the computational work across networks of independent computers using blockchain technology, thereby wresting control of AI from tech giants like Google and OpenAI.

In November, Barry Silbert’s Digital Currency Group launched Yuma AI, a subsidiary focused on advancing decentralized AI on existing blockchain networks. In October, Andreessen Horowitz’s Crypto Startup Accelerator fund led an $8.5 million investment in OpenGradient, another company developing decentralized AI technology. All together, decentralized AI startups have attracted $435 million across at least 65 deals so far this year—a nearly 200% increase over 2023, according to PitchBook.

Some decentralized AI companies are raising tens of millions of dollars before they even get started. One such operation is 0G Labs, which announced in March it had raised $35 million in pre-seed funding. The company’s high-flying ambitions are written directly into its name: 0G is short for zero gravity.

0G Labs hopes to create a decentralized AI program that operates like a blockchain-based ChatGPT, the startup’s CEO, Michael Heinrich, told me. He has the bold hope of building something that operates as smoothly as Netflix: “You go to Netflix, you enjoy movies right away. The same should be true for decentralized AI.”

Accomplishing this means building a full AI operating system from scratch—data storage, computing power and even the underlying blockchain that keeps the system transparent and verifiable. It also means tackling problems no one has solved yet—for example, how to get slow blockchain technology to handle the gargantuan computing and networking demands of large AI models.

“Skeptics would say, ‘You’re taking on way too much—this is too difficult,” said Heinrich. “My pushback to that would be: When Apple or Microsoft were being built, they built full operating systems, and many people thought that was too ambitious. It just goes back to bringing in the right level of expertise.”

Bringing in the right type of expertise—doctorate holders in fields like cryptography and AI—means Heinrich is on a rather unending quest to hire “very, very expensive people,” he said. So just a month ago, 0G Labs announced it had raised another $40 million in seed funding; in addition, investors such as Samsung and Animoca Brands said they would eventually purchase $250 million worth of crypto tokens that will someday power the 0G blockchain.

Another startup, Fetch.ai, is building something called the Agentverse, a bazaar where AI models can collaborate and hire one another without needing to consult any humans. Picture an army of automatons managing your inbox, calendar and shopping cart—haggling and subcontracting behind the scenes so you never have to click again.

“Email? I don’t use it,” joked Humayun Sheikh, CEO of Fetch.ai. “Talk to my agent.” His AI agent, that is.

Sheikh predicts this Agentverse will extend beyond the world of computers into the physical world, where practically every inanimate object will be AI powered and will communicate over a parallel, AI-built version of the internet. Imagine road signs with AI brains that cut deals with self-driving cars, exchanging tokens for traffic updates.

For all the blinding enthusiasm radiating from founders like Sheikh and Heinrich, skeptics are left wondering if AI-meets-crypto is the latest example of the hype that previously propelled Web3, NFTs, ICOs and other blockchain contortions.

For instance, when I asked SignalFire’s Iyla Kirnos for his reaction to hearing the buzzwords “crypto” and “AI” in the same sentence, he didn’t mince words. “I check my wallet to make sure it’s still there,” Kirnos said. “There’s nothing to me that makes a lot of technical sense about marrying crypto and AI,” other than appealing to naive, “momentum-driven” investors. “I don’t think any have produced anything of real value.”

What really makes the skeptics crazy is how some startups have been sliding back and forth between crypto and AI—as enthusiasm waned for one and exploded for the other. One such example involves cockfighting.

In 2022, Andressen Horowitz’s crypto fund led a $40 million investment in Irreverent Labs, a Bellevue, Wash.–based company developing MechaFightClub—a game where players bought NFT robot chickens and battled them in an arena called the Cocktagon. “Irreverent Labs is a deep technology company building advanced tech on top of a futuristic mecha-cockfighting game,” wrote Andreessen Horowitz partner Arianna Simpson in a note announcing the investment. “We couldn’t be more excited to lead Irreverent Labs’ Series A.”

But by 2023,the company had announced it was putting its robot chickens into “indefinite hibernation” and shutting down the Cocktagon, citing a U.S. regulatory environment that was unfriendly to crypto-based cockfighting.

Irreverent Labs has since pivoted to AI, claiming the machine-learning algorithms once used to animate fighting chickens proved foundational for a new AI-powered video-generation software, which it is bundling into a new service called Supermodel.

The company declined an interview. “We’re currently focused on product development and don’t have additional context to share at this time,” CEO David Raskino replied via email.

As for Truth Terminal, its ultimate economic value may seem questionable, but the money around has only continued to pile up. Another cryptocurrency has been minted in its honor: fartcoin, which currently has a total market value of some $930 million.

It’s clear that many of the people interested in Truth Terminal are approaching any investment in the ecosystem the way many approached NFTs: Acquiring a NFT was a way to signal they hold the same sensibilities and worldview as, say, a Marc Andresseen.

Michael Heinrich, the 0G Labs CEO, is a Truth Terminal fan. He threw $5,000 into the Goateus Maximus memecoin because “I just thought it was such a fun experiment. I had to be part of it,” he said. “It was more for a sense of belonging than for any particular investment objective.”