June 2024 – Sequoia Capital, one of the world’s leading venture capital firms, has released its 2024 Q2 investment report, revealing an explosive 270% year-over-year (YoY) growth in funding for AI-powered NFT projects. This surge underscores the rapid convergence of artificial intelligence and blockchain technology, positioning AI-NFTs as one of the most lucrative sectors in Web3.

Key Findings from the Sequoia Report

1. $2.8B Total Investment – AI-NFT startups raised $2.8 billion in Q2 2024, up from $760M in Q2 2023.

2. Top-Performing Subsectors:

   • Generative AI NFTs (+320% YoY growth)

   • Autonomous NFT Agents (+290%)

   • AI-Curated NFT Marketplaces (+250%)

3. Most Active Investors:

   • Andreessen Horowitz (a16z)

   • Paradigm

   • Binance Labs

Why Is AI-NFT Funding Booming?

The report identifies three major drivers:
✅ Advancements in AI – GPT-5, Claude 3, and open-source LLMs enable smarter NFT interactions.
✅ ERC-6551 Adoption – Ethereum’s new standard allows NFTs to self-upgrade via AI.
✅ Institutional Interest – Hedge funds and corporations are entering AI-NFTs for digital IP and branding.

Top Funded AI-NFT Projects of Q2 2024

1. NeuroArt – AI-generated NFTs that evolve based on collector feedback ($120M Series B).

2. Alethea AI – Autonomous NFT characters with conversational abilities ($90M raised).

3. DeepNFT – AI-powered fraud detection for NFT marketplaces ($75M funding).

Market Trends & Predictions

• AI-NFTs Will Dominate Gaming: 62% of new blockchain games now integrate AI-driven assets.

• Enterprise Adoption Rising: Brands like Nike and Disney are testing AI-NFT loyalty programs.

• Regulatory Developments: The SEC is drafting new guidelines for AI-linked digital assets.

What’s Next for AI-NFTs?

Sequoia predicts:

• 2024 Total Funding Could Reach $12B, doubling 2023’s $6B.

• AI-NFTs Will Merge with DeFi, enabling self-trading digital assets.

• Decentralized AI Marketplaces will emerge, letting users train and monetize NFT-based AI models.