(Bloomberg) -- Sentient Labs, a months-old artificial intelligence startup co-founded by an executive behind the Polygon blockchain, raised $85 million from investors including billionaire Peter Thiel’s Founders Fund.

Most Read from Bloomberg

• Democrats Weigh Mid-July Vote to Formally Tap Biden as Nominee

• Powerful Hurricane Beryl Aims at Jamaica After Grenada Strike

• Trump Immunity Ruling Means Any Trial Before Election Unlikely

• ‘Upflation’ Is the New Retail Trend Driving Up Prices for US Consumers

• Trump Seeks to Toss NY Felony Conviction After Immunity Win

Crypto venture capital funds Pantera Capital and Framework Ventures co-led the seed funding round alongside Founders Fund, according to a statement from Sentient Labs. The company didn’t disclose a valuation.

Singapore-based Sentient Labs is building an open-source platform through which developers can get paid for their contributions to emergent AI tools, such as chatbots and enterprise software. The fundraising comes ahead of the Sentient platform’s planned testnet launch, scheduled for the third quarter.

It is the latest in a flurry of eye-catching investments into early-stage AI outfits, which have multiplied in the wake of the debut of OpenAI’s ChatGPT. One recent example is French AI startup H, which raised $220 million in a seed round in May.

The proliferation of AI tools has also fanned a debate about whether tech giants like Microsoft Corp. — a major backer of OpenAI — along with Alphabet Inc.’s Google and Meta Platforms Inc. wield too much influence over technology that’s likely to shape the future.

Some crypto advocates argue that marrying the decentralized features of blockchains with AI can help mitigate the concentration of power — even if the details around how are still fuzzy.

“There’s a lot of anxiety around centralized forces running away with AI,” said Sandeep Nailwal, a co-founder of Sentient Labs, in an interview with Bloomberg News. Sentient aims to compete with those “centralized behemoths,” Nailwal said, adding that crypto “can completely disrupt the way AI will play out.”

The Sentient Labs raise ranks among the top 10 largest seed rounds by AI startups so far, according to Dealroom data.

Sentient Labs was set up earlier this year by a team comprised of Nailwal, who is also co-founder and executive chairman of Polygon Labs, alongside academics Pramod Viswanath and Himanshu Tyagi.

Sensys, a new AI venture studio led by Kenzi Wang, has also been established to support tools and companies in the Sentient ecosystem, according to the statement. Wang is a co-founder of crypto venture firm Symbolic Capital.

Cracking the Idea

The Sentient system is designed to reward engineers for tasks like labeling and refining data as well as other activities that are part of training AI models, Nailwal said. The platform is being built using software from Polygon, Nailwal’s blockchain firm, which is itself expanding into AI.

Perhaps underscoring the extent of the frenzy around AI investing, Nailwal conceded that details around how the system will run haven’t yet been fully worked out.

“We have not completely formalized that, how that structure will play out,” Nailwal said. “If we crack the idea, if we crack the technology behind it, this has a potential to disrupt the AI industry completely.”

The idea for Sentient sprang from a January conversation between Nailwal and Sreeram Kannan, founder of the much-hyped crypto project EigenLayer, according to Nailwal. It was Kannan who introduced Viswanath, a professor of engineering at Princeton University, and Tyagi, an associate professor of engineering at the Indian Institute of Science, to the project.

Roughly six months on, Sentient’s co-founders have assembled a team of 20 people, according to Nailwal. The money they raised will be used for more hiring, with a focus on AI researchers and blockchain engineers, as well as to forge partnerships with academic institutions, the company said.

Most Read from Bloomberg Businessweek

• Online Shopping Warehouses Are Reshaping Rural America

• The Fried Chicken Sandwich Wars Are More Cutthroat Than Ever Before

• Japan’s Tiny Kei-Trucks Have a Cult Following in the US, and Some States Are Pushing Back

• RTO Mandates Are Killing the Euphoric Work-Life Balance Some Moms Found

• The FBI’s Star Cooperator May Have Been Running New Scams All Along

©2024 Bloomberg L.P.