HyperLiquid co-founder Jeff Yang has warned that cryptocurrencies’ inability to attract enough top entrepreneurs is one of the industry’s biggest obstacles as young talent heads towards artificial intelligence.
The VALR podcast featured Yang’s comments on how the AI boom and the social status that comes with technology are influencing career choices for young founders. According to Yang, many talented people are still unsure in which areas they can create the most value, and relatively few pursue jobs in crypto or fintech.
Yang argued that rebuilding the financial system based on first principles will give young entrepreneurs a chance to solve difficult real-world problems. In his view, this work involves turning academic ideas into market designs that can reliably operate at scale.
Yang encouraged future founders to study the problems each industry is trying to solve, rather than judge industries by their superficial appeal. He cited on-chain finance as an area where entrepreneurs can help develop new financial systems and market structures.
AI is driving young founders away from cryptocurrencies
Yang’s concerns come as Chinese AI developers are attracting attention for their rise in global model rankings. China’s Kimi K3 recently took first place in the front-end code arena. The results prompted former White House cryptocurrency czar David Sachs to express concerns about America’s position in the AI race.
Sachs said the Kimi K3’s performance was alarming, as the model also ranked close to leading systems in several other ratings. He argued that while Chinese companies continue to improve their models, rules covering data centers, state-level requirements and proposed federal reviews could slow down U.S. developers.
“This is how we lose the AI race,” Sachs wrote.
Citing comparisons to the early Internet, Sachs argued that the United States became a technology leader by allowing companies to develop products without first seeking government permission. He called on Washington to take a similar approach to AI, using focused regulation to address specific safety concerns.
The competition Sacks described helps explain why AI is attractive to ambitious young developers and founders. However, Yang believes that cryptocurrencies still offer a meaningful technological endeavor, as building on-chain financial markets requires both entrepreneurial judgment and knowledge of economic design.
Big spending on AI comes with other market risks
Former Fidelity fund manager George Noble has warned that the investment boom could pose serious financial risks as AI companies compete for talent and capital. Noble estimated that a bursting of the AI bubble could cause 17 times as much damage as the dot-com crash, which wiped about $5 trillion from the Nasdaq.
Noble linked this prediction to the large amount of money being poured into AI infrastructure. If these investments fail to generate the returns investors expect, losses could spread beyond technology companies and impact other parts of the financial system, he argued.
“The impact of this could actually be more significant,” Noble said while discussing increased AI capital spending.
Yang did not see the expansion of AI only as an economic threat to cryptocurrencies. His warning focused on those entering the field, with the HyperLiquid co-founder arguing that on-chain finance needs more talented entrepreneurs to turn complex theories into financial markets that can serve users at scale.
