How AI and encryption technology are changing the future of the internet?

a16z Growth partner David George had a conversation with a16z crypto partner Chris Dixon, discussing the vision of a new internet, including encryption, decentralized AI infrastructure, and more. They also talked about why the original business model of the internet is collapsing and how the new internet is introducing entirely new business models for creators.

How Technology Has Evolved

Chris Dixon believes that technological waves often appear in pairs or threes. Fifteen years ago, mobile internet, social networks, and cloud computing were the three major trends. Now, AI, encryption technology, and new hardware such as robots, self-driving cars, and VR( are the three most interesting trends today. They also complement each other and develop together.

Encryption technology provides a whole new way of internet architecture. When many people mention encryption, they immediately think of Bitcoin or meme coins. However, for professionals, the essence of encryption goes far beyond this. It intersects with AI in many ways, one of the most fundamental ways being the use of encryption architecture to build AI systems.

How Cryptocurrency and AI Interact

Chris Dixon introduced several projects, such as Jensen and Story Protocol. Jensen is building a decentralized computing resource network that allows users to submit computing tasks, which are then allocated to idle computing resources around the world. Story Protocol, on the other hand, is a new way to register intellectual property, allowing creators to register their works on the blockchain, clarifying copyright ownership.

One of the core advantages of encryption technology is composability. The success of open-source software is largely due to the fact that it allows developers to combine and build upon existing modules for innovation. Story Protocol enables creative content to be freely combined like LEGO blocks.

Is AI frosting or sugar?

David George proposed a metaphor: Is AI "frosting" or "sugar"? If AI is just "frosting," then the existing industry giants will win, as they can simply add an AI chatbot to their existing products. But if AI is "sugar," meaning it is the core ingredient, then you cannot just "add it in," but rather need to build the entire product from scratch.

Chris Dixon believes that this is in line with Clayton Christensen's concepts of "disruptive innovation" and "sustaining innovation." If AI is only used to optimize existing products, then it is merely "frosting" and poses no threat to existing businesses. However, if AI fundamentally changes the ways of data storage and retrieval, then it is "cake," and it will disrupt the entire industry.

Here for the tools, here to stay for the network

Chris Dixon proposed a classic user growth strategy: "First come for the tools, then stay for the network." AI can also adopt a similar strategy, for example, tools for generating AI images can serve as an entry point, but ultimately what should be formed is a complete AI creative community.

Imitation Technology and Native Technology

The development of new technologies usually goes through two stages: the imitation stage and the native stage. AI is currently still in the mimetic stage, and the AI applications we see are mainly replacing human labor. However, the real AI revolution will occur with AI-native products, such as AI-generated game worlds, AI-generated interactive content, and so on.

AI as the Cornerstone of Creativity

Chris Dixon believes that AI will not replace human creation, but will instead give rise to entirely new forms of art, providing a new canvas for human creativity. This principle can also be applied to other fields such as consumer goods and social networks, in addition to the creative industries.

Balancing Supply and Demand in AI

The bottleneck in AI development is likely not in technology, but in the speed of human adaptation and the impact of policies and regulations. The real challenge is how to get users to accept AI and integrate it into their daily lives.

How AI is Changing Industries

Many potential applications of AI face regulatory barriers. For example, in the healthcare industry, the technical capabilities of AI diagnostics are strong enough, but regulations still limit its widespread application. The legality of AI training data is also still a matter of controversy.

What is the ideal future of the Internet?

Chris Dixon believes that we are at a crossroads. The original vision of the internet was a decentralized network, but now the flow of funds on the internet has changed, with more and more profits concentrated in the hands of a few tech giants. If the future internet is completely controlled by just a few companies, then the space for innovation will be greatly compressed. True innovation should be built on an open ecosystem, rather than being controlled by a handful of companies.