Cryptocurrency investment firm Paradigm aims to raise $1.5 billion for a new fund that will invest in companies in AI, robotics and other cutting-edge technologies, according to the Wall Street Journal.
Paradigm will continue to invest in crypto companies but will leverage its existing technology investment team to explore deals with frontier technology companies, according to people familiar with the situation.
San Francisco-based Paradigm has $12.7 billion in assets under management, according to its latest regulatory filing.
The company launched its $2.5 billion flagship fund in November 2021, which at the time was the largest crypto fund in history. The company announced its third fund in 2024. It is an $850 million venture fund focused on early-stage crypto projects.
WSJ sources said company executives decided they didn’t want restrictions that would jeopardize attractive deals.
Additionally, there are some overlaps between virtual currencies and AI, such as payments by agents and transactions by autonomous AI agents.
Paradigm to explore AI as early as 2023
Paradigm admitted that it had been “tinkering” with the fusion of AI and cryptocurrencies for three years.
In 2023, Paradigm was confirmed to have removed Web3 and cryptocurrency-specific language from its website, leading some speculators to suggest that the company was already pivoting from cryptocurrencies to AI.
Paradigm co-founder and managing partner Matt Huang denied at the time that the website changes reflected a shift away from cryptocurrencies, but acknowledged the team was researching AI.
sauce: matt fan
A few weeks later, in a longer tweet, Huang said that while “we have never been more excited about cryptocurrencies and continue to invest every step of the way,” the “developments in AI are too interesting to ignore.”
“The trend seems to be to frame cryptocurrencies and AI as a zero-sum competition, but we disagree. Both are interesting and there will be a lot of overlap. We are excited to continue exploring.”
Earlier this month, Paradigm and OpenAI released EVMbench, a new benchmark that evaluates how different AI models can detect and patch security vulnerabilities found in smart contracts.
AI will account for more than half of all VC funding by 2025
According to the OECD, venture capital investment in AI companies in 2025 will reach $258.7 billion, accounting for 61% of total VC investment, doubling its share from 2022.
VC funding for generative AI companies accounts for 14% of all AI venture capital investments, with US companies attracting the largest share of VC funding.
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