Is AI eating Crypto’s Lunch?

Nov. 21, 2025 /Mpelembe Media/ — That phrase, “AI is eating crypto’s lunch,” generally refers to the current trend where Artificial Intelligence (AI) development and related companies are attracting significantly more investor capital and attention than the cryptocurrency and blockchain sectors.

However, the reality is more nuanced than a zero-sum competition, and both areas are also seeing convergence.

Investment and Attention Shift

The primary evidence supporting the “AI eating crypto’s lunch” narrative includes:

Venture Capital Flow: There has been a dramatic pivot in venture capital (VC) funding. Investments in AI startups have soared to record highs, with a significant portion of global VC funding flowing into the AI sector. Conversely, VC funding for crypto and digital asset companies has reportedly dwindled from its peaks. Investors who once focused on crypto are now heavily chasing opportunities in AI.

Market Sentiment and Focus: AI, particularly Generative AI (like large language models), is viewed by many as the next frontier of growth and has captured the public and institutional imagination.7 The crypto market, still recovering from volatility and past scandals, has seen a reduction in speculative demand and a broader “flight from risky assets” when market fear rises.

Speculative Rotation: Market analysis suggests that some recent crypto downturns have been driven by investors simply rotating out of the more speculative corners of the market, which included crypto and crypto miners, to reallocate capital into the booming AI infrastructure and leading AI companies.

Convergence: AI and Crypto as Partners

Despite the competitive investment environment, many experts and developers view AI and crypto as complementary technologies that are increasingly converging rather than purely competing.

AI for Crypto: AI offers powerful tools for the crypto space:

Trading and Risk Management: AI-powered algorithms can process vast amounts of market data faster than humans to predict price movements, automate trading strategies, and manage risk in the volatile crypto markets.

Security: AI is used for fraud detection by analyzing transaction patterns on the blockchain to identify and flag suspicious or illegal activities.

Crypto for AI: Blockchain technology can enhance AI systems:

Auditability and Provenance: Blockchain can provide transparent, immutable records to track the training data and decision-making processes of AI models, addressing concerns about data bias and model opacity.

Decentralization: Decentralized AI platforms use blockchain to democratize AI development, preventing centralized entities from having excessive control over models and data.

Monetization: Crypto can be used to manage tokenized royalties for AI-generated content or to create decentralized marketplaces for AI services.

In summary, while AI is undoubtedly dominating the current investment cycle and media attention, the long-term future may involve a powerful fusion of the two technologies rather than one completely superseding the other.

You can learn more about how these technologies are starting to intersect in this video: The Coming Collision of AI & Crypto: What Happens Next. This video discusses the potential collision and crossover between AI and crypto, offering perspectives on how they might converge.