The Dynamic Duo for Cost Reduction, etc

• Artificial intelligence is largely used across different fields but has its challenges.

• It is believed that blockchain technology offers a solution for this.

Artificial Intelligence (AI) is becoming increasingly popular due to its potential to transform various industries including robotics, health, transportation, finance, etc. In a recent article, the biggest decentralized data storage marketplace, protocol, and cryptocurrency, Filecoin has been tipped as a perfect duo with AI to unlock more use cases. The article noted that big tech companies have dominated the field of AI as several factors make it difficult for startups to compete.  

Some of these challenges include the high computing cost, the reverse salient problem of AI, etc. Interestingly, (Decentralized Physical Infrastructure Networks) DePIN in Web3 has the potential of solving some of these challenges.

Why does AI need blockchain?@curiouscatwang makes the case for Decentralized Physical Infrastructure Networks (DePINs) like Filecoin.

1️⃣Reduction of infra costs
2️⃣Creator verification
3️⃣Infusion of democracy & transparency
4️⃣Data contribution incentiveshttps://t.co/tdbkmhVjTc

— Filecoin News (@Filecoin) June 10, 2023

The first challenge that can be solved by blockchain and AI is the Reduction of infra cost (compute and storage). Compute cost is said to be very high for new entrants in AI.

The current market dynamic in the physical infrastructure space is largely a vertically integrated oligopoly, with companies such as AWS, GCP, Azure, Nvidia, Cloudflare, and Akamai enjoying high margins. For example, AWS has an estimated 61% gross margin on commoditized computing hardware.

With this, DePIN networks such as Filecoin can save costs between 75 percent to 95 percent in infrared cost through three levers namely: balancing the economy of these markets with cryptoeconomic design, pushing up the supply curve, and reducing overhead costs. 

Other Concerns That Can Be Addressed by Filecoin

According to a poll, 50 percent of AI scientists agree with the concern that there is a 10 percent chance of AI destroying the human race. Currently, there is a voice clone of Biden criticizing transgender women. This and many other bad uses of AI raise serious concerns. 

Interestingly, cryptographic proof generated by digital signatures unique to the original creator of the content can prevent deep fakes. 

This signature can be created using a private key, which is only known to the creator, and can be verified using a public key that is available to everyone. By attaching this signature to the content, it becomes possible to prove that the content was created by the original creator — whether they are human or AI — and authorized/unauthorized changes to this content.

Also, there is an Infusion of Democracy in AI. There is “closed-door nature of Big Tech’s LLM precludes the possibility,” what the writer refers to as “AI Democracy.” With this, every developer and user is required to contribute both algorithms and data to an LLM model. As a solution, blockchain can enable users to provide feedback as input into continuous fine-tuning. Developers also have a role in this. 

Another problem is the Installation of Incentives for Data Contribution. Most valuable consumer data is said to be proprietary to big tech companies. However, there is little incentive to share such data with third parties. 

Interestingly, blockchain has a solution for this.

Web3 introduces a new mechanism called dataDAO that facilitates the redistribution of revenue from the AI model owners to data contributors, creating an incentive layer for crowd-sourced data contribution. Due to length constraints, I won’t elaborate further, but below are two related pieces.

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