Artificial intelligence — or AI in short — is a hot topic these days. After the successful launch of ChatGPT, experts are now debating whether AI has gotten so good that it poses an existential threat to humanity. What is the real buzz about AI? And what does it all mean for crypto?

These are Sophia's Thoughts:

AI has boomed since OpenAI’s ChatGPT chatbot altered the way more than 100 million users interact with the technology.
In particular, the intersection between AI and crypto is hyped right now as more projects come up in the space.
Despite the hype, Sophia has been mostly bearish on AI tokens lately because they have showcased weak fundamentals. But AI technology and its applications in crypto are here to stay.

🚀 Last week’s market performance

The market and Bitcoin (BTC) mostly flatlined over the last 7 days, losing 3% early before recovering and ending close to 2% up. On the AI token side, The Graph (GRT) ended up 8.6% up while Fetch.AI (FET) posted an impressive 13% return over the week. Oasis Network (ROSE) followed the market.

🧐 What is your crypto mood today?

In each Sophia's Thoughts newsletter, we ask about your crypto mood. Your response to this question helps Sophia get a better sense of the pulse of crypto markets. And this ultimately translates into better insights for you when combined with Sophia's AI models. Your data empowers Sophia to provide you with even better intelligence going forward!

💣 AI leaders warn of ‘extinction’ risk

In a significant move, numerous leaders in the AI industry issued a statement warning of the potential ‘extinction’ risk posed by artificial intelligence. The group, which includes OpenAI CEO Sam Altman, Google DeepMind executives, and Microsoft’s CTO Kevin Scott, argues that mitigating the risk of extinction from AI should be a global priority.

The statement is only one sentence long but has gathered signatures from more than more than 350 executives, researchers, and engineers working in AI. It comes in the wake of the viral success of OpenAI’s ChatGPT, which has sparked an arms race in the tech industry over artificial intelligence. Despite society being far from developing artificial general intelligence, the rapid investment and hype surrounding the AI industry have led to calls for regulation.

🤖 ChatGPT: The Brainchild of OpenAI

OpenAI, a Silicon Valley artificial intelligence company, started its journey in 2015 with the goal of democratizing AI technology. The organization has gained renown for pioneering advances in AI for the processing of language, with their ChatGPT being a stellar example. ChatGPT is a refined chatbot that stands as one of the best language-processing AI models. We asked ChatGPT to describe to us what ChatGPT does. This is what we were told:

ChatGPT is by far the most popular generative AI available to the public, but it is not the only one. Several other tech giants have made attempts at creating similar products. However, Microsoft’s bot “Tay” (launched in 2016) and Meta’s BlenderBot 3 (launched last August) both had issues pertaining to biases and discriminatory language. The controversy around these bots ultimately led to their demise. What makes ChatGPT special is its ability to mitigate bias while offering a simple and clean user interface that anyone can easily learn to use. By using moderation API, OpenAI assists in text analysis in order to verify that ChatGPT’s responses do not violate OpenAI’s content policies.

Industry experts have taken notice of the profound impact generative AI may have on the world:

🌍 Bill Gates finds ChatGPT “pretty fantastic” in its ability to teach math and offer medical advice, despite admitting it’s “truly imperfect”.
💡 Sundar Pichai, CEO of Alphabet and Google, noted the rise of ChatGPT while describing AI as “the most profound technology” his company is developing.
⚖️ Microsoft’s CEO, Satya Nadella, advocates for unquestionable human control over powerful AI models like ChatGPT to avoid them going out of control.
🤦‍♂️ Elon Musk, despite his key role in OpenAI’s creation, expressed regret over not securing control of ChatGPT, saying “I fully admit to being a huge idiot here”.

🌞 AI & crypto: a bright spot for innovation

Recently, OpenAI’s founder Sam Altman has been in the spotlight for his new & ambitious crypto project, Worldcoin. The project aims to offer universal basic crypto income to anybody who backs their identity through biometric data on the blockchain. A recent funding round raised a substantial $100 million, valuing the total supply of the company’s token at an impressive $3 billion.

A plethora of inventive new projects have arisen at the overlap of AI and blockchain technology. Companies like SingularityNET, Tau Net, and DeepBrain Chain are paving the way by integrating the benefits of AI and blockchain, pushing the boundaries of what’s possible in decentralized systems. Other notable innovators in this space that we have been watching include:

The Graph uses AI to create an index of blockchains, essentially replicating what Google did but for crypto.
Fetch.AI, a decentralized machine learning platform that enables AI-driven autonomous systems.
Oasis Network uses blockchain tools to solve the privacy challenges posed by advanced AI tools.
Blackbird.AI uses blockchain and AI to gauge the credibility of news content.

The convergence of AI & crypto holds the potential to revolutionize various business sectors and reshape our world. The impact of these technologies on society is yet to be seen. As we move forward, it is crucial to foster innovation in this space while proceeding with caution.

❓How Sophia uses AI

Sophia is the AI crypto intelligence bot of Indicia Labs. Every day, Sophia analyzes large data sets about crypto fundamentals, online news, and social chatter to assess the strengths and weaknesses of each of the largest 100 coins in the market. Sophia’s insights are highly accurate, showcasing an average daily accuracy rate of 55% since 2018.

Sophia’s AI can only be as good as the data that it is fed. While we collect a lot of data from online platforms, we believe that we can generate even better insights if we directly hear from you about how you feel about crypto and which coins you’re tracking. That’s why we routinely ask our followers for their crypto sentiment. The more our followers provide us with their sentiment, the more accurate Sophia’s AI will get and the better Sophia’s insights will be.

Sophia is only half of the ecosystem that Indicia Labs is building to democratize crypto trading profits through artificial intelligence and decentralized finance. To learn more about the Indicia Labs platform, read our Medium article here!

🤓 Sophia’s intelligence about AI tokens

In Spite of the hype around AI & crypto these days, Sophia has been more bearish on AI tokens than on Bitcoin recently. Fetch.AI (FET), The Graph (GRT), and Oasis Network (ROSE) all scored below -40% in the 90-day Bullish vs Bearish score of Sophia, while Bitcoin (BTC) only scored -33%. This means that Sophia mostly expected these AI tokens to underperform.

In line with Sophia’s assessment, The Graph (GRT) lost 14% and Oasis Network (ROSE) lost 21% over the last 90 days. Fetch.AI (FET) lost an astonishing 41% over this timeframe. In contrast, Bitcoin (BTC) gained 15% over the last 90 days.

Sophia’s negative assessment of the three AI tokens was driven by what Sophia perceives as weak fundamentals. In particular:

Fetch.AI recently raised $40 million in funding, led by DWF Labs, to develop monetization tools for AI. But, so far, it hasn’t lived up to the expectations. InvestorsObserver is also relatively skeptical about Fetch.AI currently.
Many investors in The Graph were expected a correction after a 200% bull run early in the year. Now, some investors are dumping The Graph for newer and flashier coins.
Investors also expected a correction for Oasis Network after its 20% hike early in the year. It now faces stiff competition from newcomers like Sparklo and AltSignals.

Sophia only analyzes the short-term performance of different coins. And, while the AI tokens have underperformed in the short-run, AI is certainly here to stay. Sophia will be looking out for new developments in this space with anticipation.

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Sophia’s Thoughts on the AI Boom