Cardano founder Charles Hoskinson predicts the cryptocurrency industry will "eat" artificial intelligence by solving problems such as payments, data provenance, and alignment. He argues that rising data center costs and electricity limits will force a shift toward decentralized networks, drawing parallels to the post-dot-com bust. Hoskinson also criticized U.S. crypto regulation, following the Senate’s recent failure to advance the CLARITY Act.
Hoskinson: Crypto Will ‘Eat AI’ as Data Center Spending Spree Nears Breaking Point
Charles Hoskinson says the cryptocurrency industry is about to do to artificial intelligence what it once did to cryptography. In the September 16 episode of the Deeptech Insights podcast, the Cardano founder argued that blockchains could provide payment rails, data ownership, and distributed computing as the AI infrastructure boom runs into economic limits.
Hoskinson stated that spending ten times more on data centers every year cannot continue, citing insufficient electricity to support that pace. He noted that companies like OpenAI and Anthropic must become profitable at scale, with pre-training creating much of the financial pressure.
The developer compared AI’s current position to cryptography when he entered the industry. He said cryptographers objected to being associated with cryptocurrency until the sector had the money to hire the best talent, and he expects AI to follow the same path within five to ten years. “Cryptocurrencies are going to eat AI because we solve all the hard problems that AI can’t solve,” Hoskinson said.
His alignment argument centers on blockchains creating shared rules among participants, while AI companies make their own decisions on issues like free speech. A blockchain-based system could offer a shared mechanism for those rules, also tracking who created data and automating royalties when AI systems use someone else’s work.
The Input Output CEO also proposed pooling ordinary phones and GPUs as a training resource, arguing this would beat building new data centers. He compared it to the fiber optic buildout of the late 1990s, when much of the cable sat unused for nearly a decade before demand caught up. If frontier AI runs on smaller, local models, Hoskinson argued cryptocurrency is “the only coordinating technology that exists to do that.”
Hoskinson also predicted the CLARITY Act won’t pass Congress until 2029, blaming three mistakes by the Trump administration, including tying crypto’s image to Trump-branded tokens. The US Senate failed to advance the bill on September 15, falling short of the needed 60 votes. Hoskinson previously called an earlier draft a “horrific trash bill,” though he said assets like Cardano and XRP would likely be grandfathered in.
