Decentralized AI to Capture $1.8 Trillion Market, Analyst Estimates

According to analyst Miles Deutscher, artificial intelligence (AI) is steadily emerging as one of the most transformative narratives in the crypto space.

In a recent thread on X (formerly Twitter), Deutscher laid out his bullish thesis on AI-integrated crypto projects. He highlighted their massive growth potential as the sector gains traction within decentralized ecosystems and broader financial markets.

Why AI-Driven Crypto is Poised for Growth

Deutscher outlined the immense opportunity within the AI sector, citing forecasts that place the global AI market’s total addressable market (TAM) at $12 trillion over the next six to seven years. If decentralized AI captures just 5% of this market, the valuation could reach $600 billion—a 15x growth from current levels.

Adding speculative premiums, the analyst estimated the sector’s potential at $1.8 trillion, representing a 45x opportunity. Despite the attention AI has garnered, Deutscher noted that AI-focused crypto projects remain underrepresented, ranking 34th by market cap among crypto sectors. With growing interest, he predicts AI could move into the top 10 crypto sectors within the next year.

Deutscher’s thesis revolves around four key factors driving AI crypto adoption. First, mainstream AI awareness coming as public intrigue around AI’s societal impact fuels mass interest.

Second, innovation momentum from regularly released AI products sustains the sector’s visibility. This aligns with crypto’s attention-driven economy.

Third, low entry barriers as crypto offers an accessible and cost-effective way for retail investors to participate in AI’s growth compared to traditional equities. Lastly, the synergy between AI and crypto is presented by the rise of autonomous artificial intelligence agents capable of executing on-chain transactions and portfolio management. This, according to Deutscher, highlights the practical integration of AI into blockchain technologies.

As AI continues to captivate global attention, its integration with blockchain technology is poised to reshape both industries. AI-driven crypto projects offer new opportunities for innovation and investment. This is from autonomous trading agents to decentralized data processing.

Deutscher’s Top AI Crypto Picks for 2025

Deutscher revealed his top AI-focused cryptocurrencies, emphasizing infrastructure and pick-and-shovel plays across various AI verticals:

Bittensor (TAO): A leader in decentralized AI research, TAO has seen adoption in scientific circles. Recent Ethereum Virtual Machine (EVM) compatibility positions it for further expansion.

Near Protocol (NEAR): An established layer-1 blockchain integrating AI capabilities, NEAR combines reliability with innovation, maintaining 100% uptime since launch.

Grass (GRASS): GRASS connects real-world data with AI-driven crypto applications, boasting strong community support following a successful airdrop.

Spectral (SPEC): SPEC focuses on AI agent infrastructure, enabling autonomous, personality-driven agents to trade and engage on-chain.

Deutscher emphasized that many of his picks are “pick-and-shovel” plays—protocols enabling the development and deployment of AI-based tools. These include computation infrastructure, decentralized LLMs, and AI-focused blockchains. He argued that these foundational layers will underpin the next wave of innovation and adoption in AI and crypto.

“Primarily, we have AI Agents and agent infra, computation, and DePIN, decentralized LLMs, and AI blockchains/infra for AI dApps. I am investing in all of these verticals, with a particular focus on agent/AI infrastructure,” Deutscher added.

While Deutscher is optimistic, he acknowledged the varying risk profiles of the projects he highlighted. He stressed the importance of due diligence, especially for smaller-cap tokens with higher upside potential but increased volatility. For investors, balancing exposure between large-cap and smaller-cap projects is essential.