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 other investors participating, as Exabits announced on Tuesday, though the names of other investors remain undisclosed. The fundraising started in July and closed in October, according to co-founder Dr. Hoansoo Lee. He did not provide details on the funding structure but indicated that a token will be launched in the future.

This seed round increases Exabits' total funding to $20 million. Earlier this year, the company raised an undisclosed pre-seed round and a strategic funding round led by Portal Ventures, accumulating around $5 million.

What is Exabits?

Exabits is focused on tokenizing GPUs to decentralize computing, which it describes as "the currency of the digital age." Lee pointed out that GPU compute performance has significantly outpaced traditional assets like Bitcoin and gold, indicating substantial growth potential.

"AI's impact on the world is only scratching the surface, and we are excited to be at the forefront of this evolution, driving growth and market traction through advanced infrastructure and our unique GPU tokenization model," Lee stated.

Exabits' tokenization model provides direct exposure to GPU compute assets, aiming to create a liquid market that generates revenue and rewards token holders. Despite the upcoming token launch, Exabits has reported considerable revenue growth, averaging a 300% increase per quarter and reaching an annual recurring revenue (ARR) of $10 million this past year.

Competitive Landscape

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

Interest in crypto-AI startups is rising, fueled by the intersection of AI's potential to disrupt industries and crypto's decentralized nature, as highlighted by recent reports. However, skepticism remains. Erick Zhang, managing partner at Nomad Capital and former Binance executive, cautioned that many startups lack clear value propositions.

"Most of these startups will fail," he stated. At a recent conference, investors pointed out that many projects are lacking expertise and substance, with expectations that most will result in significant financial losses. David Pakman, managing director at CoinFund, expressed doubts about successfully decentralizing crucial components of the AI ecosystem in the near future.