Microsoft partners with Aptos blockchain to marry AI and web3

Artificial intelligence has captured the hearts, minds and wallets of the technology industry. So it’s little surprise that Microsoft, which has several irons in the AI fire, is working to expand its footprint in the area. On Wednesday, the company announced that it is partnering with layer-1 blockchain Aptos Labs to work on AI and web3.

“The primary focus for both of us is solving our respective industries problems,” Mo Shaikh, co-founder and CEO of Aptos Labs, told TechCrunch+.

The collaboration allows Microsoft’s AI models to be trained using Aptos’ verified blockchain information, Shaikh explained. Aptos will also run validator nodes for its blockchain on Microsoft’s Azure cloud, which it anticipates will bring greater reliability and security to its service.

Microsoft is also looking to the future. “We predict that AI will be infused into web3 solutions at greater scale in the coming months and years,” Daniel An, global director of business development for AI and web3 at Microsoft, said in an email to TechCrunch+.

There’s little doubt that AI is having a massive impact on society. “We can become incredibly efficient in using these tools every day in our lives,” Shaikh said. “Whether it’s searching and putting together an index of the best restaurants in your neighborhood or helping you write code for your job or research.”

For technologist’s AI aspirations to come true, there is a growing need for transparency, trust and verification of AI-generated content, An said. “For example, how do we know that LLM-generated outputs are authentic [and] trustworthy? How do we know that the training data is bias free in the first place? Blockchain-based solutions can help with verifying, time-stamping and attributing content to its source, thereby improving credibility in a distributed digital economy.”

An compares large language models to content creators “on steroids” and blockchains as “a yardstick for transparency and trust.” To help people become more comfortable with AI — and LLMs more specifically — companies have to make sure users trust how the technology works. “The openness and immutability of blockchain can improve the trust that people place in AI-generated content and provide confidence that they’re making the right decisions.”

AI needs to evolve responsibly, and web3 could help it earn the required credibility, Shaikh said. “Everything we capture onchain is verified and that verification can [help] train these models in a way that you’re relying on credible information.”

Microsoft’s interest is in having credible information to train models in a way that’s verifiable, which is where Aptos can fit in, Shaikh said. “In order to do that you need an incredibly performant blockchain with high throughput.”

The throughput of Aptos’ blockchain can support up to 160,000 transactions per second and has a goal of reaching the ability to handle “hundreds of thousands by the end of the year,” Shaikh said. It also ranks as one of the fastest blockchain networks, alongside Avalanche, with a time-to-finality of less than one second, according to Messari research.

With fast throughput, quick settlement times and a cost to use at a fraction of a cent, Aptos’ blockchain may have all three things needed to make it attractive to Big Tech companies interested in building AI-related products and services — like Microsoft.

AI to web3, web3 to AI

Helping mature tech companies use web3 tech to delve deeper into AI may assist those companies getting deeper into the blockchain realm. A major impediment to onboarding more developers into web3 today is how hard it is to write safe and secure smart contracts because it’s not super intuitive, An said.

“If you want to come and write a smart contract or development application, it’s difficult to do that today,” Shaikh said. But applications like the GitHub Copilot integration, which supports blockchain-based contract development, and Aptos Assistant, an AI chatbot that aims to bridge Web 2.0 and web3, could help non-web3-native companies access smart contracts and other decentralized tech.

“For some it’s trial and error, but that means that bad actors are just a keystroke away from taking advantage of poorly secured smart contracts, particularly in DeFi,” he said. “AI can help to make the developer experience, and in turn the actual end product, better. There’s also an opportunity to use AI to make sense of onchain data and identify emerging trends as well as pinpoint potential security vulnerabilities and so forth.”

Typically, if a developer wants to get a web3 application up and running, they have to look at smart contract reference materials, a process that can take days, before they actually write their needed smart contracts and other app elements. “It’s a clunky experience,” Shaikh said. “With the GitHub Copilot and [Aptos’] chatbot, we have a way in a conversational manner [that developers] can look at smart contracts references.”

For example, developers can search “most popular NFT smart contracts” with Aptos’ chatbot, or “projects audited and approved by other applications” to quickly find and discover smart contracts using those references, Shaikh said. “It’s not just a matter of saving time but giving developers the confidence of right products to build.”

Despite everything transpiring in the bear market, Shaikh is still optimistic on crypto’s long-term future. “Builders are continuing to build and some of the largest enterprises are moving into the space and it’s nice to cut through the noise and work with folks who understand the long-term benefits of the market in a serious way.”

In previous market cycles, web3 developers built for small audiences, but now there’s large-scale interest from some of the biggest companies globally like Microsoft. “This is an important signal to pay attention to,” Shaikh said.

The future

The implications of web3 and AI integration could transcend current financial use cases in crypto to potentially catalyze greater automated services in other sectors. Right now, Microsoft and Aptos are exploring a “Financial Services solution” that allows users to bring asset tokenization, payments, central bank digital currencies and other similar services to market. Other projects may follow.

Web3 is still relatively nascent in its adoption but is going through a “maturation process through experimentation and innovation,” An said. “Many of our enterprise customers in the financial services industry, in particular, are exploring how blockchain technologies can help meet institutional and corporate needs in areas such as asset tokenization and digital assets.”