Exabits Raises $15 Million in Seed Funding

Exabits, a crypto-AI startup focused on tokenizing GPUs, has raised $15 million in a seed funding round at a $150 million valuation.

Hack VC led the round, with several other investors participating, although Exabits declined to name them. The company began fundraising in July and closed the round in October, according to co-founder Dr. Hoansoo Lee. He did not provide specifics on the funding structure but mentioned a token will be launched in the future.

This seed round brings Exabits’ total funding to $20 million. Earlier this year, Exabits raised an undisclosed pre-seed round followed by an undisclosed strategic funding round led by Portal Ventures, which together totaled about $5 million.

What is Exabits?

Exabits aims to decentralize computing by tokenizing GPUs, which it refers to as “the currency of the digital age.” Dr. Lee emphasized that GPU compute performance has surpassed traditional assets like Bitcoin and gold, indicating potential for significant growth.

AI’s global impact is just beginning, and Exabits hopes to lead this evolution by developing advanced infrastructure and a unique GPU tokenization model. This model seeks to provide direct exposure to GPU compute assets, thereby creating a liquid market, generating revenue, and rewarding token holders. Even before its token launch, Exabits has experienced notable revenue growth, boasting a 300% average quarterly increase, leading to an annual recurring revenue (ARR) of $10 million.

Competitive Landscape

Exabits faces competition from Compute Labs and GAIB, which raised $3 million and $5 million in pre-seed funding, respectively. Recently, Hyperbolic, another crypto-AI startup with a GPU marketplace, raised $12 million in a strategic round led by Variant and Polychain Capital.

Interest in crypto-AI startups is rising due to the fusion of AI’s disruptive potential and crypto’s decentralized nature. However, skepticism persists among investors about the viability of many such startups. Erick Zhang, managing partner at Nomad Capital, cautioned that numerous ventures are pursuing trends without solid value propositions, predicting that many will fail. Similarly, Dragonfly General Partner Rob Hadick warned that almost everyone could incur significant losses.

David Pakman of CoinFund stated that efforts to decentralize core AI functions are unlikely to challenge established centralized players soon.

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