After the AI Agent Bubble Burst: What is the Real Value of Web3 AI?

In the fourth quarter of 2023, the AI agent sector has rapidly emerged, with its market value skyrocketing from nearly zero to over 20 billion dollars. Various "agents" have suddenly become popular, including funny and quirky ones, as well as "financial agents" that can automatically trade cryptocurrencies and help you make money. There have even been claims of investment DAOs aimed at investing in other agents, as well as DAO organizations advocating for "human-agent co-governance." The variety of gameplay makes it feel like getting rich overnight is just around the corner.

However, this wave of enthusiasm came quickly and left just as fast. After the bubble burst, many projects collapsed one after another. However, some AI infrastructure projects with practical value began to emerge. True value is becoming apparent, and the next wave of Web3 AI is brewing, which may be more than just hype and deserves serious attention.

We all know that once a new track or new hotspot appears (such as the combination of Web2 AI, Trump supporting cryptocurrencies, and AI), the market often ignores the fundamentals. As long as it looks lively, has hype, and demonstrates well, even if the actual utility is not significant, the market capitalization can easily exceed one hundred million dollars.

A later project took a completely different approach - it open-sourced AI, allowing any developer to easily get started and mine gold for themselves. This concept quickly resonated, the community grew rapidly, and the number of stars and forks on GitHub skyrocketed (and is still growing today).

The total valuation of a certain ecosystem once broke through 5 billion USD, while another project was also close to half of that amount at its peak. Other interesting AI agent projects also reached a market value of 1 billion USD at one point.

Today, the situation is completely different. New agent projects performing well have a market value mostly between 3 million and 10 million; older projects have been compressed to a range of 10 million to 50 million. The valuation ceiling of the entire sector has been compressed, with the total market value dropping from a peak of 20 billion dollars to the current range of 4 to 6 billion.

The Rise of Infrastructure, Accelerating Development of Web2 AI

The current market is no longer superstitious about those "seemingly impressive" bubble projects, but instead is beginning to focus on the real fundamentals. Especially in the context of the rapid development of AI models in Web2, people are paying more attention to the long-term value of infrastructure and decentralized AI.

AI models from major tech companies are almost updated every month, becoming stronger, faster, and smarter. For example, as soon as the image generation feature of a large AI company was launched, it sparked a craze for "Ghibli-style" images, quickly flooding the screens.

The consumer products in Web2 are also evolving rapidly. With the enhancement of underlying AI capabilities, many previously unattainable product experiences are now possible. Emerging development tools have greatly improved developer efficiency, with fast and numerous feature updates. AI agents and smart workflows have now permeated every corner, and the entry barrier is getting lower and lower. For users, switching tools almost incurs no cost—if one is not user-friendly or is expensive, alternatives with better UI and smoother experiences can be found immediately. The competition in the entire market is becoming increasingly fierce, but it also accelerates the landing of truly valuable products.

The Awakening of Data Sovereignty: Who is the Real Owner of Data?

Amidst all this rapid development, more and more people are starting to realize a problem: there are various AI agent applications everywhere now, but most of them use centralized technology—so who really owns my data? Where will my chat records go? If I discuss some private content with an AI, will it really keep it confidential? Or will it be uploaded, analyzed, and used to train other models?

This issue has become even more important after a recent update from a well-known AI company—its chatbot's "memory function" can now reference all past conversations to generate more personalized responses. This feature is indeed cool; imagine a future where everyone has their own AI personal assistant, chat companion, emotional support... But this also means that your data will be "long-term held" by a certain platform, and you are no longer the master of your data.

Once others control your conversations, preferences, emotions, and even your habits, the consequences may not just be as simple as "a better experience."

This is also why the topic of "data sovereignty" is becoming the next focus of AI + Web3. Data that truly belongs to the users is the most valuable future.

The Rise of Decentralized AI (DeAI)

Predictions made last year indicated that by the second quarter of 2025, decentralized AI will truly enter the public eye. Especially against the backdrop of increasing concern over privacy and data ownership, underlying infrastructures that can provide confidentiality, verifiability, and transparency of user data ownership will receive more attention and usage.

Currently, we see trends emerging in three main directions:

Web2 AI venture capital trends

• Some startups supported by a well-known incubator are launching vertical field AI agents (specifically addressing issues in a certain field);
• A well-known venture capital firm has begun to position itself for the next phase of consumer AI product trends, presenting its own investment logic;
• A certain AI search company has launched a fund specifically for investing in AI.

Web3 AI venture capital trends

• Start investing in decentralized AI infrastructure;
• Distributed training networks, computing power sharing, and other sectors are gradually gaining momentum.

Web3 AI's retail trend

• AI Agent ecosystem remains one of the hot topics;
• Consumer-level AI applications are gradually becoming more diverse, attempting to land from productivity tools to emotional companionship.
• Users are increasingly concerned about "whether the AI products I use really serve me, rather than harvesting my data."

These trends intertwine to collectively drive DeAI from concept to practical stage. The year 2025 will be a key moment for validating the value of decentralized AI.

Web2 vs Web3 AI: Completely Different Rhythms and Playstyles

The Web2 market is much larger than Web3. Many traditional enterprises are seeking to leverage AI for transformation and optimize their business processes—such as acquiring more customers, improving conversion rates, increasing sales, etc. These types of enterprises usually have clear demands, and many are focused on specific niches, so they hope to find AI tools that can accurately address their "specific pain points." This has also attracted many young entrepreneurs, targeting these niche demands to become vertical AI agents.

Compared to traditional SaaS, the benefits brought by AI agents are more direct—either saving a lot of costs or directly attracting more customers to make money. Therefore, the subscription prices for these AI tools can also be sold at a higher price, and many startups achieve annual revenues of millions or tens of millions of dollars within a few months of launch, which is not without reason.

But the way Web3 works is completely different. The blockchain itself is a foundation layer tailor-made for decentralized AI (DeAI). All actions can be verified on-chain and are immutable; it naturally provides a trustless environment; it supports decentralized computation; users can truly own their own data, models, and use cases. Simply put, the future of Web3 AI will allow users to understand how their data is used, comprehend the decision-making process of AI, have autonomous control over models and use cases, and even profit from it.

Venture capital in Web3 has already started to position itself for this future.

Why Retail Investors Love AI Agents

For retail investors in Web3, DeAI (decentralized AI) is indeed quite difficult to understand: a bunch of new words and concepts that sound like an alien language. Therefore, initially, they are most easily attracted to those AI agents that are easy to understand and fun—like chatbots that can talk and tell jokes in a humorous way. These "entertainment-type AI agents" are indeed very appealing, but over time, retail investors begin to realize that these things seem to have no practical use. Moreover, with the recent poor market conditions, a large number of useless projects are slowly being eliminated, while those agents that have practical value and can provide functions, despite a decline in valuation, are still surviving.

This wave of "cleansing" has made more and more people realize that only AI projects with real use cases and core product capabilities have a future. As a result, project parties have begun to turn to two directions: either developing real AI products themselves to solve practical problems, or collaborating with real technological and valuable DeAI projects.

This transformation has two positive implications: it prompts people to start paying attention to the underlying infrastructure that was originally "incomprehensible"; it allows AI agents to become not just performance tools but products that can deliver real results. Some projects have already become typical cases—not only powerful in functionality, but also bringing some cool DeAI technologies into the public eye. This indicates a trend: while retail investors may not understand the technology, they will gradually be educated by "truly useful" products.

One of the most interesting aspects of a decentralized AI ecosystem project is that it allows ordinary people to participate in investment. Currently, most DeAI projects are still in the early stages, where only venture capital or "strategic partners in the circle" can invest, and many projects haven't even issued tokens. But this project is different. Users can directly use their tokens to vote in support of promising subnets, effectively "switching positions" into the sub-tokens of these DeAI projects and making early layouts.

Although some people have previously complained: cross-chain bridges and trading experiences can be a bit troublesome... their underlying technology, product logic, and overall atmosphere are indeed strong. Especially with the addition of a certain team, the UX/UI design of the entire ecosystem is developing more towards a "user-friendly" direction. Because in the mechanism of this ecosystem, each subnet must rely on market recognition to obtain more rewards (mining incentives) — those who are useful and capable will be able to receive more distribution.

Therefore, for these subnets, "making it clear to users what you are doing" becomes extremely important. A certain team is doing just that. Their product direction is very clear: optimizing UI/UX for ordinary users. They not only have multiple practical subnets (like a super convenient AutoML platform where users can train models directly and run them with just a click of a button. Their latest flagship product is also very cool: an AI Agent platform where you can drag and drop modules to create AI Agents, truly achieving "zero-code building of AI agents". This experience is somewhat like a Web3 version of a "foolproof AI factory", making it very suitable for non-technical users to get started).

Overall, this ecosystem is not only one of the most advanced DeAI projects technologically, but it also leads the way in user-friendliness for regular participants. This team, which has a clear product logic and is user-friendly, is a key player in making this ecosystem vibrant.

We are in a transformative era dominated by Web3 AI. The past bubble of inflated market values driven by hype has been replaced by actual infrastructure, decentralized AI, and real application scenarios. Whether it's enterprises optimizing business with AI in Web2 or retail investors experiencing the convenience of new agents in Web3, future data sovereignty and user participation will become key. Web3 AI is far from reaching its peak. The real show has just begun.