Mark Cuban-backed startup that fuses AI with NFTs raises $16 million

Alethea AI, a Mark Cuban-backed startup that combines NFTs with artificial intelligence technology, announced Tuesday that it raised $16 million from private venture capital firms through a restricted token sale. 

Investors in Alethea include Multicoin Capital, Alameda, and Dapper Labs, the firm behind NBA TopShot and CryptoKitties. 

“There is a cambrian explosion in innovation and creativity happening in the NFT space,” said Alethea CEO Arif Khan in the statement. “Creators and communities will soon demand to do more with their NFTs creating meaningfully rich, free-flowing and interactive consumer experiences built on a crypto-native stack, and we’ll be making that possible through the Alethea AI protocol.”

Creators can incorporate Alethea’s AI into NFTs to form personality traits, allow real-time interaction, and other novelties. For example, the company claims that AI-infused CryptoPunks can have rap battles against others.

One video posted on Twitter shows a conversation between NFT42 founder Jimmy McNelis and an NFT called Pandora happening in real time. McNelis asks how the NFT got its name and it replies with the backstory. “My mind is actually blown,” wrote McNelis, “This is real time conversation. It feels like speaking to a real person. This is the future.”

Alethea sold its first AI-infused NFT, which it called an ‘intelligent NFT’ or ‘iNFT,’ in June for over $478,000. Alethea joins TCG, creating digital horse racing, Splinterlands, and other NFT startups to recently receive sizable venture funding.