Ethereum. The name evokes romantic visions of a decentralized future, a world without the grasping hands of big tech. Now, the whispers are growing louder: Ethereum will decentralize AI. Eric Connor, a former Ethereum core developer, is one of the most vocal proponents. Before we all uncork the champagne and declare victory over the centralized AI overlords, let’s pump the brakes. Is this the real revolution, or are we being sold an expensive-looking but ultimately useless Trojan Horse?

AI, The New King Needs Ethereum?

We are promised that Ethereum’s transparency, decentralization, and aligned incentives will unlock a new era of AI. Smart contracts will help to demystify the former “black box” of AI models. In parallel, token economies will reward ethical behavior, and micropayments will create a robust decentralized AI economy. Sounds utopian, doesn't it?

Here's the inconvenient truth: major AI players thrive on opacity. Their competitive advantage is in proprietary algorithms, large data silos and a narrative monopoly. What incentive do they have to freely give up that power to adopt an open, transparent, decentralized system? It would be roughly equivalent to asking Amazon to deconstruct its AWS cloud computing infrastructure and turn it over to a community-owned cooperative. Not gonna happen.

We’re witnessing a clear rising tide for transparency and fairness in AI, particularly from regulators and ethically-minded consumers. Demand alone doesn't guarantee adoption. Incentives do. Unfortunately, the incentives for big AI companies are currently stacked heavily toward centralization. They’ve already invested billions in their existing infrastructure, and they’re not going to abandon that infrastructure overnight.

Gas Fees, Data Silos, and Scalability

Let's get real about the technical hurdles. Running complex AI models on Ethereum is prohibitively expensive. The prohibitive cost of these gas fees, by themselves, would render many proposed applications of AI services economically infeasible.

Data is another sticking point. AI models are voracious consumers of data, and a substantial amount at that. Where will this data be coming from in a decentralized AI ecosystem, right? Second, will people want to open up their data in return for tokens? Maybe. But are they going to be willing enough to share data for powerfully rich AI models to be trained? That's a much bigger question. Without strong requirements, data silos will persist. In reality, they could even get more piecemeal and more difficult to use than they currently are.

Ethereum’s transaction throughput is still severely limited, even accounting for Layer 2 solutions. Is it up to the monumental computational task of training and deploying AI models at scale? Color me skeptical. If your AI is generating revenues for you, then you’re not going to want to wait 15 minutes for your transaction to validate.

Think of it like this: imagine trying to run a modern video game on a 1990s computer. Okay, maybe that’s possible in theory, but it would be dreadful performance. The bottom line is that Ethereum, in its current form, is the 1990s computer of the AI world.

True Decentralization Or New Control?

The Ethereum Foundation’s blog provides a fantastic overview of some exhilarating AI agents such as Luna, AIXBT and Botto. All of these projects are interesting and innovative, demonstrating the potential of AI on Ethereum. Bankr and HeyAnon are cutting through the complication on the blockchain, and helping the average user get involved. That's all great.

Are these one off, isolated experiments sufficient to establish an ecosystem that is genuinely decentralized and diverse? Or are they merely the proof-of-concept platforms that will ultimately be consumed and co-opted by the bigger, badder, more centralized players?

My concern is that we are just moving the point of control from Big Tech to Big Crypto. Rather than being at the mercy of Google and Facebook, we’ll be at the mercy of whales and mega miners. Is that really progress?

Here's where the "unexpected connection" comes in: remember the early days of the internet? It was meant to be a place outside of corporate control, a decentralized utopia. What happened? A few companies (the big four— Google, Amazon, Facebook, and Apple) were able to establish an overwhelming competitive advantage. Are we really doomed to make the same mistakes with AI that we did with blockchain?

Who will control the infrastructure of decentralized AI? Who will control the data? Who will control the algorithms? If the answer is “a small group of powerful actors,” then we’re not really decentralizing anything. We’re not solving anything, we’re moving the problem around… we’re just basically shifting the deck chairs on the Titanic.

We’re going to need to be sober about the hard fights to come. Ethereum could be the key to decentralizing AI, but it’s not yet a done deal. It’s going to take enormous effort, creativity, and, above all else, a complete change in incentives and motivation.

If the Ethereum community wants to make this dream a reality, they need to focus on:

  • Scalability solutions: Layer 2 solutions, sharding, and other technologies that can dramatically increase Ethereum's transaction throughput.
  • Data privacy: Develop privacy-preserving AI techniques that allow models to be trained on sensitive data without compromising individual privacy.
  • Economic incentives: Create token economies that reward ethical behavior, promote data sharing, and incentivize the development of open-source AI models.
  • Regulation: Advocate for regulations that promote transparency and fairness in AI, while also fostering innovation.

If not, Ethereum’s AI dream might become a Trojan Horse. Instead of a national treasure, what looks like a wonderful boon could actually be taking us to a different caste of overlords. And that, my friends, would be a tragedy indeed.