The Web3 + AI Daily #73
Big Tech leaders are painting a vision of AI's future. But is it the future we want?
Hello, everyone, and welcome to all newly joined subscribers!
This is The Web3 + AI Daily, your definitive guide to the intersection of blockchain and AI! Two of the most influential voices in AI - Microsoft‘s Satya Nadella and Google DeepMind‘s Demis Hassabis, have recently shared their visions for the future of AI. Both essays sparked widespread discussion, so today I’m offering my perspective on each.
Thank you for being here! Let’s dive in.
What’s Hot in Web3 + AI?
Microsoft’s Satya Nadella Makes The Case For Decentralized AI
In a recently published essay, Microsoft‘s Satya Nadella outlines a fundamental defect in today’s centralized AI industry: The fact that customers must relinquish their personal or enterprise data to use advanced AI systems.
In the AI age, the buyer risks giving away knowledge, just in order to use what they bought.
The CEO of Microsoft, the company that has invested in both OpenAI and Anthropic, goes on to critisize these same labs for preventing clients from studying their frontier models and using the insights to train their own models.
What Nadella presents as the solution is, in fact, what the Decentralized AI community has been championing for years: data ownership, proprietary learning infrastructure, and private AI inference.
That is why enterprises need a real trust boundary for their human capital and token capital to compound. It is where an organization’s data, traces, evals, adapted weights, and memory accumulate and improve together. And it is a hard boundary across which nothing crosses, not even the intelligence exhaust, without consent. Enterprises will demand the rights to use model outputs to fine tune and/or train their own models. I think of this as every firm’s right to align models to their enterprise accountability obligations.
Moreover, he virtually urges enterprises to move away from relying on one single “generalist” model and instead build “orchestration layers” and “continuous learning loops” where it is easy to switch between different models. As TechCrunch comments:
While Nadella never uses the words “open source” as the method for retaining ownership, this is an obvious subtext. Yet, there’s another subtext.
After experimenting with proprietary model makers, [large companies] start asking themselves: “Can I take an open source model and run it on-prem? It will do almost 90% of what the big one’s doing. It will cost way less.”
Though, Nadella goes even further - while echoing Alex Karp, he scolds “the current regime” for not allowing customers to have control over their own compute resources, models, data stack, and alpha:
As Alex Karp put it: “What the technical customers want is control over their compute, their models, their data stack, and their alpha. They want to know they own the means of production, and it’s not being transferred to someone else.” The current regime does precisely the transfer Karp and companies fear.
TechCrunch reads this as urging corporations to build their own AI infrastructure on the cloud - preferably, Microsoft Azure:
Nadella’s solution is the kind of thing the CEO of a giant cloud provider would suggest. He wants companies to “retain ownership” of their data, including prompts, feedback, etc. So he’s urging them to build their own “proprietary learning environments” on the cloud (where their data is likely already stored anyway and, conveniently, could mean Microsoft’s cloud, Azure).
But I don’t. Microsoft’s cloud is still a centralized Big Tech platform. As long as your AI stack depends on infrastructure you don’t own or control, you cannot claim true sovereignty over your data, models, or compute. If a company truly wants to retain control over its AI infrastructure, it would be better served by a distributed cloud - a more resilient and cost-effective alternative.
I’m generally puzzled by Nadella’s stance. Don’t get me wrong - I appreciate the inadvertent endorsement, because his essay underscores exactly why Decentralized AI matters. For years, the DeAI community has advocated for distributed training and inference, verifiable computation, and open-source models as the only viable path to making AI private, safer, more affordable, and universally accessible.
Yet, Nadella - and, for that matter, Karp - is not a disinterested observer or some bistanding analyst. He is an integral part - not to say one of the architects - of that “current regime” he mentions. After all, Microsoft is the backbone of today’s centralized AI industry.
Which begs the question: what is he really suggesting? His proposal cuts against the business models of OpenAI and Anthropic, and, by extension, Microsoft’s own financial interests as their key partner.
I completely agree with Nadella that the future of the AI belongs to open-source, privacy-preserving alternatives. But where would that leave OpenAI, Anthropic, Meta, SpaceXAIA, and the rest of the hyperscalers that Microsoft ultimately supports?
Demis Hassabis Urges the U.S. to Lead Frontier AI Standardization
Demis Hassabis, CEO and co-founder of Google DeepMind and a laureate of The Nobel Prize for his work on AlphaFold, calls for a global framework for Frontier AI security, but one lead by the United States of America.
At first glance, what Hassabis suggests is sensible. He turns to the AI industry, and the world as a whole, and pleads: AI will be creating unprecedented challenges, so instead of racing each other, let’s collectively try to mitigate the risks. I’m paraphrasing. However, what he proposes in practice is much more nuanced:
The article was met with a hint of indignation and provoked two reasonable questions which I was also inclined to ask while reading: why should the US lead these efforts, and isn’t an “industry-funded watchdog” an oxymoron? Two comments left under Hassabis’s article on LinkedIn summed up these concerns perfectly, so I’m sharing them with you - the first is by Adi Gaskell and the second - by André Carmo.
I’m curious why this should be US-led, especially when the UN met last week on this very topic. This is a global issue, and I’m not sure there’s any appetite in the world for US values to lead the way on this, especially under the current administration. It also seems highly problematic for the standards body to be funded by the industry itself. Responsible AI has already shown that self-regulation is not the way to go.
The FINRA analogy is the part worth stress-testing. Industry-funded standards bodies work when their incentives are structurally independent of the firms they assess. When they aren’t, they drift toward legitimizing incumbents. The proposal hints at this with held-out evals and independent board seats, but one design question will decide most of it: can this body actually afford to fail a model its funders spent a billion dollars training? If it can, then it’s real governance. If it can’t, it becomes a compliance ritual that makes everyone feel safer than they are. Getting the incentive design of the Standards Body right looks as hard as designing the benchmarks themselves, and probably matters more.
Moreover, Hassabis clearly writes with the conviction that AGI is imminent. He goes as far as posing questions, which, in my opinion, are way premature:
Even if we solve these hard technical challenges, there will be further complex economic and philosophical questions to tackle: what sorts of new economic models will be needed to help everyone thrive in a post-scarcity world? What values do we want to live by, what will meaning and purpose be, and how might even the human condition itself change?
Shouldn’t we take a step back and focus on agreeing what AGI even means first? If we still don’t have a clear definition of AGI, who and how will determine when we’ve actually reached it? After all, a general artificial intelligence that surpasses human capabilities in every domain possible is still only hypothetical.
Also - and that is quite unfortunate - there appears to be no evidence whatsoever that the current advancement of AI is leading us towards a post-scarcity world. On the contrary, wealth is becoming increasingly concentrated in the hands of a few (US-based) tech founders.
So let’s start there. Should we empower these same tech founders to set the AI standards for the rest of the world? I don’t think so.
Thank you for reading! I hope you found this article insightful.
If you’d like to keep up with the latest developments at the burgeoning intersection of blockchain and AI, I invite you to subscribe.
And if you find value in my writing, consider supporting the newsletter. I’d greatly appreciate it.
The Web3 + AI Book Club is live on Fable. Follow the link below and come join our literary community.
I'm looking forward to connecting with fellow Crypto x AI enthusiasts, so don't hesitate to share your thoughts here or reach out on LinkedIn, Instagram, or Firefly.social.
Disclaimer: The content of this newsletter is provided for informational and educational purposes only. Nothing contained herein should be construed as financial advice or as a recommendation to buy, sell, or hold any of the companies or assets mentioned.
Please don’t take my views at face value. Instead, do your own research (DYOR), think critically, and share your perspective so we can challenge ideas, learn from one another, and arrive at better conclusions through thoughtful discussion.