Why is there a structural opportunity in encrypted AI?

Author: Alex Liu Source: X, @liu_web3

From Anthropic's choices and the predicament of being caught in the middle, decentralized AI not only has a chance to survive, but also a structural opportunity. That is, its living space is inevitably created by the interplay of various human forces.

First, Anthropic's predicament is inevitable because it faces the core contradiction of the challenges in cutting-edge AI: • Maintaining leadership requires massive closed computing power + data + control (Anthropic/OpenAI model). • However, this centralization inevitably invites attacks from multiple parties: regulation, litigation, coercion, and model distillation/copying. • Result: Short-term explosive profits (explosive API revenue), but long-term collapse of trust, regulatory strangulation, and being overtaken by open-source/low-cost technologies. Once centralized cutting-edge AI technology is cornered (e.g., forced, forced divestment, or large-scale model distillation), the open-source + locally running model naturally becomes a potential option. Users will turn to: privacy, local inference, no single point of censorship, and the inability to be blocked with a single click. From a practical standpoint, Anthropic currently faces pressure from multiple sides; the larger its scale, the more likely it is to become a political/geopolitical target. This means that: Crypto + AI is a suitable solution, and institutional opportunities also exist. Crypto precisely addresses several pain points that centralized AI cannot escape, forming a complementary closed loop: 1. Neutrality: No single company/server can be forced to remain neutral. Open-source model weights + local/edge operation + crypto coordination (payments/incentives) equals "exit rights" rather than "voices." 2. Privacy & Data Sovereignty Centralized training = data drain → privacy lawsuits. Decentralized = local model + federated learning + crypto encrypted data market, user data stays on the device, or is traded on-chain via ZK/homomorphic encryption. Users truly own their data sovereignty. 3. Verifiable & Trustworthy In the AI ​​era, slop/spam/fakes are everywhere, and trust is scarce. Crypto can provide: • ZK-ML (Zero-Knowledge Machine Learning) proof of reasoning processes • On-chain provenance (model/data source on-chain) • Decentralized verification (trusting mathematics, not companies) 4. Incentive & Capital Formation New Paradigm Cutting-edge training is too expensive (computing power/energy/talent). Potential solutions for Crypto: • Tokenized computing marketplace (renting idle GPUs, globally distributed) • Crowdsourced training (like Bittensor subnets, contributing intelligence earns TAO) • DAO funding cutting-edge open-source efforts • Avoiding political risks from VCs/big companies, directly incentivizing global participants with tokens 5. AI needs crypto's trust verification AI spam is rampant, requiring crypto to provide cryptographic verification (low trust); AI activation efficiency, while crypto provides verifiability, preventing forgery, a perfect division of labor. So, what are the potential opportunities for crypto + AI? AI agent infrastructure, similar to Ethereum and Virtuals, provides AI agents with basic identity/reputation/payment/capital/collaboration, ultimately driving the rise of the agent economy. *Privacy-first inference layer* ZKML, FHE (fully homomorphic encryption) + on-device, model behavior is auditable and no one needs to be trusted. However, this requires a long development period. *Data marketplace* Users share personal data to obtain tokens (with privacy considerations). *Computing Power and Model Market* Distributed computing power is difficult to develop, but there will be demand; in the model market, some projects are persisting. Overall: In the short term (3-5 years), centralized AI systems will be far ahead due to their huge computing power advantage; In the medium term (5-10 years): Political/geopolitical attacks + distillation + trust crises will lead to the structural rise of decentralized systems; In the long term (10 years later): "Not your keys, not your bots"—a key future trend in AI is the rise of crypto AI. In short: Anthropic's predicament is precisely the window into the potential of the crypto + AI combination. Centralization pursues "scale equals security," but in a multipolar world, the opposite is true—neutrality is the ultimate security. This is not a narrative, but a structural escape route.