As AI continues to dominate corporate attention and venture capital investment, the once-beloved blockchain field sometimes feels like an abandoned child. Still, many crypto proponents argue that blockchain can solve some of the most pressing problems posed by AI, from identity verification to preventing deepfakes. That's why one startup, Space and Time, is developing software that brings the immutability of blockchain to AI applications. The company's $20 million Series A, led by crypto-focused venture firms Framework Ventures, Lightspeed Faction, Arrington Capital and Hivemind Capital, will give it ample resources to realize its vision.
Space & Time raised $20 million in funding led by Microsoft's M12 Ventures, which also participated in the company's Series A in September 2022.
“[We're]moving to a world that's AI-driven, which means you don't know what's AI-generated and what's generated by individuals or companies,” Space and Time co-founder and CEO Nate Holliday told Fortune in an interview. “We think it's really important to be at the center of this to ensure verifiability, trust and transparency as applications are built in this new world that's driven by Space and Time.”
AI × Blockchain
Space and Time's pitch is simple, at least in technical terms: the promise of cryptocurrency is that data can be coded directly onto the blockchain without an intermediary, meaning it can't be tampered with or misunderstood – as long as you know how to interact with it and what to look out for. Sending a transaction between Bitcoin wallet owners doesn't require a bank or broker to step in and misrepresent what happened.
AI is often the exact opposite: Applications we've grown accustomed to, such as ChatGPT, are black boxes: we ask questions and get outputs, but they offer little insight into the process and no way to interrogate them, meaning that if the answer is wrong, we have no way of understanding how the agent came up with the solution.
At a high level, Space & Time is tackling the thorny problem of verifiability. Its technology aims to ensure that when an AI application provides output, its origins can be verified and, ideally, that it's correct. Holliday argues that the way to achieve this is with blockchain, which is essentially a type of database that, in theory, is less susceptible to human interference.
Initially, Space and Time pitched its solution only to blockchain companies, positioning it as something of a decentralized version of data storage service Snowflake. That means it would act as a data warehouse, but unlike other crypto-native solutions like Filecoin, Space and Time would be designed to allow applications to quickly retrieve and access data. This plan proved attractive to companies building in the DeFi world, which revolves around financial platforms, such as lending apps, that store large amounts of user information and need to be constantly updated.
Framework Ventures co-founder Michael Anderson said he was initially attracted to Space and Time because he realized that a similar product from Snowflake on Web3 could expand its use cases. He said the idea now is to apply the benefits of blockchain verifiability to non-blockchain-based applications, such as traditional financial institutions, which can use blockchain-native tools (i.e. ZK proofs) to cross-reference third-party data such as personally identifiable information (PII). For example, if banks and DMVs were to integrate with Snowflake, Space and Time could help banks use DMV data to verify someone's age without having to store the data themselves.
AI is the next frontier. As AI agents start completing tasks over the internet, like booking a flight, they will need to programmatically execute transactions that follow rules about using credit cards and verifying data accuracy. In this future world, Space and Time wants to be the blockchain-native database that new applications and the AI agents that interact with them rely on.
Of course, both cryptocurrency and AI are still in their early stages, so a lot has to go right before this kind of technology becomes widely adopted. Still, Space and Time has made enough progress to attract investment from top blockchain venture funds as well as Microsoft, which is looking to compete with so-called hyperscalers like Google and Amazon. In addition to its database solutions, Space and Time is also using Microsoft's generative AI products to build blockchain app development tools that its customers can use.
“[Space and Time]has real people building real technology, and that's hard to find, especially in the blockchain and AI space,” Anderson said. “Seeing entrepreneurs like these coming in makes me excited about blockchain.”
