The intersection of cryptocurrency and artificial intelligence has entered a cooling-off period, with venture capitalists warning that the initial hype around decentralized AI protocols has faded. Anand Iyer of Canonical Crypto and Kelvin Koh of Spartan Group told attendees at Consensus Hong Kong 2026 that capital and talent are now flowing toward more practical, utility-focused applications rather than speculative ventures.

Both investors criticized the overinvestment in GPU marketplaces and attempts to create decentralized alternatives to major AI models from companies like OpenAI and Anthropic. The capital requirements for such ambitious projects, Koh noted, are "night and day" compared to what's available in the crypto ecosystem. Instead, they see promise in purpose-built, full-stack solutions that address specific problems from the ground up.

Iyer highlighted startups that are bypassing expensive SaaS tools to build custom internal systems using AI in days, emphasizing that "speculation won't drive product anymore." Both investors stressed that proprietary data, regulatory advantages, and go-to-market strategies have become the new competitive moats. For founders seeking funding, Koh delivered blunt advice: the era of simply wrapping ChatGPT functionality is over, and entrepreneurs must demonstrate genuine user value to attract investment.