'Bitcoin was the wrong token': Meltem Demirors says AI is pricing intelligence instead

Meltem Demirors, a longtime crypto investor and the founder of Crucible, is revisiting a thesis she developed six years ago around the convergence of energy, computing, and digital currency.

She argues that Bitcoin helped establish the infrastructure playbook that's now driving the artificial intelligence boom.

"I think AI is where it is today because of the precedent set by Bitcoin," Demirors said Thursday during an interview with The Block at Avalanche Summit in New York.

Demirors said she became "obsessed" with the relationship between energy, computing power and crypto after watching bitcoin (BTC) miners "take energy and computation to create digitally scarce money."

But looking back on this after more than half a decade, Demirors sees that while the infrastructure portion of the thesis mostly followed her expectations, she chose the wrong ultimate output.

"Now it turns out that Bitcoin was the wrong token," Demirors said. "The actual token that the world today is pricing, and that’s getting trillions of dollars of capital interest, is intelligence."

Demirors pointed to the crypto roots of companies that have become major pieces of the AI infrastructure buildout, including CoreWeave, which started out as an Ethereum mining operation, and Crusoe, which was mining bitcoin using flared natural gas power back in 2018.

Crypto has accumulated "an incredible amount of knowledge and capacity and know-how" that it has brought into AI, she said.

The AI pivot has almost fully enveloped publicly traded bitcoin miners who are now redirecting power capacity toward AI and high-performance compute customers. Demirors called the potential impact on Bitcoin's security "a very real and valid concern," adding that she is "hard pressed to name a single Bitcoin miner that hasn’t pivoted to AI HPC."

Still, she pointed to Bitcoin's difficulty adjustment mechanism gives the network a way to respond to computing power moving elsewhere, improving economics for the miners that remain.

"If Bitcoin struggles, that should deeply concern everyone," Demirors said. "It is the bellwether. This is still a Bitcoin industry."