Bridgewater Information Director: Crypto Assets have long been rotten, willing to bet the future on AI.

Bridgewater's Chief Information Officer Greg Jensen stated in a recent interview that most use cases of Crypto Assets still fall within speculation, Arbitrage, and regulatory gray areas, which have long been corrupted. In contrast, AI is the true powerful force that can drive productivity and structural changes in the Capital Market.

Early research on AI and crypto assets ultimately only favors AI.

Jensen admitted that he started researching Crypto Assets around 2012 and 2013, and also learned to understand the underlying encryption and decentralized architecture. At that stage, he also delved into AI, so both were once regarded by him as potential future infrastructures.

However, more than a decade of technological, industrial, and market changes has gradually made him realize that AI has indeed impacted our daily lives and industries, while the progress of crypto assets has fallen far short of expectations. Most applications of crypto assets have not truly addressed the market efficiency problem, and more often than not, they simply increase system complexity, even creating new risks.

And this is also the reason why he later fully shifted his capital, decision-making, and research focus towards AI.

The essence of the technology is questionable; blockchain is just a more inefficient database.

Jensen offers sharp criticism of the core architecture of blockchain. He believes that the so-called distributed ledger is essentially “splitting a database into countless parts,” relying on a large number of nodes to perform repeated calculations and verifications, simply to prevent any single entity from gaining control.

Although this design can operate in an environment of extreme distrust, the cost is extremely high resource consumption and very low efficiency. He pointed out that this architecture is not aimed at increasing speed or reducing costs, but rather it is forced to pay a huge price to address trust issues. He stated bluntly:

“Living in a world without trust is inherently very inefficient, and what cryptocurrency represents is that kind of world.”

In his view, blockchain can exist in specific scenarios, but it is not a better technological choice.

Bitcoin is useful but don't deify it, position it as a partial substitute for gold.

Among all Crypto Assets, Jensen analyzes Bitcoin separately. He admits that under the global decline in trust towards government and financial systems, Bitcoin can indeed play an important role in cross-border value transfer without relying on banks or official infrastructure.

From this perspective, it has certain attributes of “digital gold.” However, he also emphasizes that there are fundamental differences in historical depth, physical properties, and global consensus between Bitcoin and gold, and it should not be overly mythologized. He particularly questions the practices of certain companies that incorporate large amounts of Bitcoin into their balance sheets and package it as a business model, believing that these practices often see the narrative running ahead of demand. He further emphasizes that Bitcoin has its value, but that does not mean the high valuation of the entire Crypto Assets industry is justified.

The encryption industry still attracts bad actors, and the regulatory vacuum has become the biggest breeding ground.

Jensen's critique of the culture in the encryption industry is the sharpest segment among all viewpoints. He points out that the encryption industry has long attracted those in the financial sector who are best at exploiting regulatory gray areas and information asymmetry. It can even be said that the encryption industry has been the best place for criminals from the very beginning.

He believes that regulatory lag, complex product structures, and the natural packaging of “anti-establishment” narratives make the entire crypto ecosystem particularly susceptible to speculation, arbitrage, and fraudulent activities. He pointed out that corruption issues do not only appear in altcoins or meme coins, but even in some models that use crypto assets reserves companies (DAT) as a name, which are also filled with stories that are more compelling than the fundamentals. For him, this is a structural problem of the entire industry, rather than an isolated incident.

The importance of AI is underestimated, and its influence spans the globe.

The conversation then turned to AI, and Jensen believes that the importance of AI is greatly underestimated; it is not just a technological topic, but a core force that influences geopolitics, financial markets, and the macro economy.

He reflected on his research evolution in AI reasoning, language understanding, and small data capabilities since 2012, which led him to invest in OpenAI and Anthropic. Ultimately, in 2022, he began creating an “artificial investor” that could generate investment intuition, and by 2024 it was able to deliver actual excess returns.

Resource competition intensifies, and AI investment enters the J curve period.

For Jensen, AI is entering a resource competition phase, with electricity, chips, and scientists becoming the most scarce strategic resources. Tech giants view AI as a matter of survival, so funding will not slow down.

He believes that early AI investment has a strong J-curve characteristic, where higher productivity will only emerge after a significant consumption of resources. At the same time, due to AI investment's extreme independence from labor, it will lead to a “polarization” of GDP growth and the job market. In summary, Jensen indeed views AI as the most critical core technology of our time, emphasizing that without attempting to understand AI, one cannot grasp the future macro environment.

The picture illustrates the J-curve growth of AI as mentioned by Jensen.

This article Bridgewater's information chief: Crypto Assets have long been in a state of decay, willing to bet the future on AI first appeared in Chain News ABMedia.