AI, Crypto, and Building the Next Internet with a16z’s Chris Dixon

<h1>AI, Crypto, and Building the Next Internet with a16z’s Chris Dixon</h1>

This article summarizes a conversation between a16z General Partner David George and a16z crypto Founder and Managing Partner Chris Dixon, exploring the synergistic relationship between Artificial Intelligence (AI), cryptocurrency (crypto), and the evolution of the internet. Dixon outlines his vision for a new internet architecture, emphasizing how crypto can decentralize AI infrastructure, foster network effects, and create new economic models for creators in an AI-driven world.

<h2>Key Themes Discussed:</h2> <h3>1. Technology Waves and Interconnections</h3> Dixon draws parallels between past technology waves (mobile, social, cloud) and the current emerging wave comprising AI, crypto, and new hardware (robotics, AR/VR). He argues these technologies are complementary and mutually reinforcing, much like the previous wave. <h3>2. The Intersection of AI and Crypto</h3> <ul> <li><b>Decentralizing AI Infrastructure:</b> Dixon highlights concerns about the increasing closed-source nature of AI development. He advocates for crypto's role in building open, decentralized AI systems, citing projects like Gensyn for crowdsourced compute and Story Protocol for decentralized intellectual property registration.</li> <li><b>Open Source vs. Closed Source:</b> The conversation touches upon the importance of open-source AI models (like Llama, Flux, Mistral) and the challenges in ensuring true openness and reproducibility, especially when model weights are not released.</li> <li><b>New Economic Models for Creators:</b> Story Protocol is presented as a mechanism for creators to define terms for content usage and remixing, ensuring revenue flows back to them, thereby democratizing access and monetization. This contrasts with traditional, often difficult, business development deals.</li> <li><b>Composability:</b> Similar to open-source software's success (e.g., Linux), crypto enables a "Lego brick" effect for media and content, allowing creators to build upon each other's work and fostering innovation.</li> <li><b>Incentive Systems:</b> Crypto's strength in designing new incentive systems is crucial for gathering data for AI, evaluating models, and bootstrapping networks.</li> <li><b>Identity and Verification:</b> Projects like World are using blockchain for cryptographic proof of identity, offering a more robust alternative to traditional CAPTCHAs and fraud prevention.</li> </ul> <h3>3. Breaking the Economic Pact of the Internet</h3> Dixon explains the historical "covenant" of the internet: websites provided content and allowed indexing by search engines in exchange for traffic. He argues that AI chatbots, by providing direct answers, break this pact, potentially leading to a consolidation of the internet into a few dominant platforms and undermining the long tail of websites and creators. He stresses the need to recognize this shift and explore new economic structures. <h3>4. Skeuomorphic vs. Native Technologies</h3> <ul> <li><b>Skeuomorphic Phase:</b> AI is currently in a skeuomorphic phase, replacing existing jobs and processes with cheaper, more efficient AI versions (e.g., AI chatbots for customer service). This phase focuses on improving existing paradigms.</li> <li><b>Native Phase:</b> The exciting future lies in the native phase, where AI enables entirely new behaviors, media forms, and applications that have no offline equivalent, much like social networking emerged from the internet.</li> <li><b>Second-Order Effects:</b> Dixon emphasizes that the most significant impacts come from second-order effects – the broader societal changes that new technologies enable, citing the invention of cars leading to highways and suburbs, and social media influencing political movements. He believes AI's second-order effects will unfold over decades.</li> </ul> <h3>5. AI as the Creative Substrate</h3> Dixon likens generative AI to film's role after photography. While photography initially threatened traditional art, it ultimately enabled new art forms like film. Similarly, AI can serve as a new "canvas" or "base layer" for human creativity, leading to new media and applications, rather than just replacing existing ones. He hopes AI will ultimately unlock more creative opportunities than it eliminates. <h3>6. Balancing Supply and Demand in AI Adoption</h3> <ul> <li><b>Bottlenecks:</b> The transition to the native phase of AI is constrained not just by technical capabilities but by human creativity, policy, and regulation.</li> <li><b>Startup Ecosystem:</b> The startup ecosystem is more mature, providing better advice, funding, and mentorship, which helps direct capital and energy towards solving problems.</li> <li><b>Demand-Side Challenges:</b> Changing organizational behavior, workflows, and overcoming industry resistance (e.g., Hollywood unions, audiobook publishers banning AI voices) are significant hurdles.</li> <li><b>Regulatory Landscape:</b> Legal battles over copyright (copying vs. learning) and potential congressional legislation will shape AI's future, as it's too significant to be left solely to market forces.</li> </ul> <h3>7. The Ideal Future Internet</h3> Dixon envisions an internet that is community-owned and governed, with economic benefits flowing to the edges rather than concentrating with intermediaries. He warns against the current trend of consolidation by a few large tech companies, which he calls "platform risk." He advocates for new architectures, open-source AI, and supporting "little tech" startups to foster competition and innovation. <h2>Conclusion:</h2>

The conversation underscores the transformative potential of AI and crypto, not just as standalone technologies but as forces that can reshape the internet's architecture, economic models, and creative landscape. The focus is on building a more decentralized, creator-centric, and innovative digital future.