Market Note: The Surprising Interplay of AI & Cryptocurrencies

Introduction

A recent and dramatic surge in artificial intelligence innovation has likened the field to a Cambrian explosion. AI went from the realm of science fiction for many to something rapidly approaching reality. Although AI’s development and application have steadily progressed over the past decade, the turning point was arguably in October/November 2022 with the public launch of OpenAI’s ChatGPT. This event sparked widespread public interest, as evidenced by ChatGPT amassing its first million users in just five days, outpacing many popular consumer applications to the same milestone, such as Spotify and Instagram.

Despite the growing user base, mainstream media coverage of AI (and ChatGPT in particular) has remained surprisingly scant, ​​all while user adoption rates continue to relentlessly surge upward. The media narrative shifted dramatically when ChatGPT continued to break records, becoming the fastest application to accumulate 100M users. For reference, TikTok (the next fastest application) took 5 times longer to achieve the same feat.

This groundbreaking event coincided with a barrage of online courses promoting AI literacy, applications rooted in AI, AI-driven chatbots, artwork, music, and more. AI was fast becoming “the talk of the town,” beginning to capture the mindshare of the masses.

The AI hype isn’t limited to the general public, however, as the number of AI-related mentions on earnings calls and other transcripts of publicly traded companies has increased 4x from January 2023. This recent surge in AI interest may evoke feelings of familiarity. Indeed, it’s quite reminiscent of the initial excitement that surrounded blockchains and their most well-known offspring, cryptocurrencies. For instance, BiOptix, a biotech company, completely pivoted its business and renamed itself to Riot Blockchain in October 2017.

A Biotech Company Changed Its Name to ‘Riot Blockchain’ and Its Stock Is Surging

Adopting the same playbook, VERSES Technologies has renamed itself to VERSES AI.

VERSES Technologies Announces Name Change to VERSES AI

In both cases, stock prices saw significant upticks to the tune of 500% (BiOptix) and 195% (VERSES Technologies) a few months after renaming.

Another well-known aspect of budding industries is that they attract a lot of capital and, by extension, capital farmers. During the blockchain hype, struggling startups would often hold an ICO to raise funds and perhaps revive their businesses.

Take the messaging app Kik as an example. Kik was facing intense competition from the likes of Facebook and Instagram. To this end, the messaging company created its own cryptocurrency,