DeFi AI Trough to Utility-Driven Opportunities: VCs See Maturity and Moats

[Para 1: The Lead] Two venture capitalists at Canonical Crypto and Spartan Group assess the crypto-AI intersection entering a trough from frothy speculation, signaling a shift toward utility-driven, focused applications with reduced capital and talent flowing into broad AI model replication. [Para 2: Supporting Details & Context] Iyer and Koh highlight over-investment in GPU marketplaces and full AI model replicas, noting capital is “night and day” ahead of demand. They see stronger potential in purpose-built, full-stack solutions that solve specific problems by integrating compute, data, and model layers. Proprietary data, regulatory advantages, and go-to-market edges are increasingly critical moats. For fundraising, Koh advises that a simple wrapper on ChatGPT is no longer sufficient; founders must demonstrate clear user value and execution.