Paradigm Turns the Page Beyond Crypto
Paradigm, the San Francisco-based venture firm that helped build the crypto industry's infrastructure, is raising up to $1.5 billion for a new fund targeting artificial intelligence, robotics, and what the firm broadly calls "frontier technology," the Wall Street Journal reported on February 27, 2026.
The firm, co-founded by Coinbase co-founder Fred Ehrsam and former Sequoia partner Matt Huang, currently manages $12.7 billion in assets, making it the largest crypto-native venture operation in the world. Its portfolio reads like a who's who of decentralized finance: Uniswap, Lido, Optimism, Blur, Cosmos, and dozens of other protocols that now underpin billions in daily volume.
But the new fund signals that Paradigm's leadership sees a ceiling, or at least a floor, on how much of the firm's future should be tied exclusively to crypto.
Why $258.7 Billion in AI Funding Changes the Calculus
The numbers explain the move better than any pitch deck. In 2025, venture capital investments in AI firms reached $258.7 billion, accounting for 61% of all global VC funding, according to the OECD. That is double AI's share from 2022. Meanwhile, crypto venture funding, while recovering from its 2023 trough, has not recaptured anything close to the frenzy of 2021 and 2022.
Paradigm's co-founder Huang framed the expansion as additive rather than extractive. "Both are interesting and will have plenty of overlap," he told reporters, pushing back on the narrative that crypto and AI are competing for the same pool of talent and capital. He described AI developments as "too interesting to ignore."
That overlap already has a name in crypto circles: agentic payments. The idea is that autonomous AI agents will need to transact on behalf of users, buying compute, paying for API calls, settling micro-invoices, all without a human clicking "confirm." Blockchain rails, particularly stablecoin-based payment channels, are a natural fit for machine-to-machine commerce because they settle in seconds and do not require a bank account.
Paradigm has already dipped a toe here. In late 2025, the firm collaborated with OpenAI on EVMbench, a benchmark that measures how well AI models can detect and patch security vulnerabilities in Ethereum smart contracts. The project found that GPT-5.3-Codex could exploit over 70% of critical contract bugs that previously stumped every model tested.
The $12.7 Billion Elephant in the Room
What makes Paradigm's move notable is scale. This is not a crypto fund dabbling in AI with a side allocation. The $1.5 billion target, if fully raised, would make it larger than the firm's most recent crypto-focused vehicle, an $850 million early-stage fund closed in 2024.
For context, Paradigm's flagship 2021 fund was $2.5 billion, the largest crypto fund in history at the time. The new AI-and-frontier fund would sit between those two in size, suggesting the firm views frontier tech as roughly equivalent in opportunity to early-stage crypto.
Paradigm will use its existing technical investment team to evaluate deals across both sectors, rather than spinning up a separate division. That staffing choice matters. It means the same analysts who have spent years evaluating consensus mechanisms and tokenomics will now also be looking at robotics startups and foundation model companies. The crypto thesis does not get its own protected lane.
What This Means for Crypto Founders
If you are a crypto founder pitching Paradigm in 2026, you are now competing for attention against AI and robotics deals. The practical effect is that the bar for crypto investments rises. A protocol needs to demonstrate either clear product-market fit or a credible intersection with the AI economy to stand out in a portfolio that now spans humanoid robots and language models.
The broader signal is even more important. Paradigm is not the first crypto VC to diversify. Andreessen Horowitz (a16z) launched dedicated AI and gaming funds years ago while maintaining its crypto arm. Polychain Capital has explored AI-crypto crossover investments. But Paradigm was, until now, the purest play: a firm that defined itself entirely through crypto infrastructure.
When the purest play widens its mandate, it tells the market something about where the marginal dollar of venture returns is expected to come from over the next five to ten years.
For crypto card users and DeFi participants, the downstream effects are subtler but real. Venture capital is the fuel that builds the next generation of protocols, wallets, and self-custody infrastructure. If that fuel gets split across sectors, the pace of crypto product development could slow, or it could accelerate in the specific places where crypto and AI converge, like on-chain payments for AI services and wallet-based identity for autonomous agents.
The Agentic Payments Bridge
The most interesting part of Paradigm's thesis may be what it reveals about the future of crypto payments. If AI agents become the dominant users of payment rails, the design requirements change dramatically. Agents do not care about Apple Pay compatibility or airport lounges. They care about programmability, settlement speed, and cost per transaction.
Stablecoins already dominate this use case. Circle's USDC and Tether's USDT settle in seconds on Layer 2 networks for fractions of a cent. A world where AI agents process millions of micro-transactions per day is a world where stablecoin spending rails become critical infrastructure, not just a convenient way to top up a debit card.
Paradigm's bet, then, is not really crypto versus AI. It is a bet that the two will converge on payments, identity, and programmable money in ways that make the current distinction between "crypto company" and "AI company" feel quaint within a few years.
The Venture Capital Rotation Nobody Wants to Say Out Loud
There is an uncomfortable truth beneath the optimistic framing. AI captured 61 cents of every venture dollar in 2025. Crypto's share, while growing, remains a fraction of that. When a firm with $12.7 billion in AUM decides it needs a separate vehicle for AI and frontier tech, it is acknowledging that the crypto market alone may not generate enough dealflow to deploy capital at the scale its LPs expect.
This does not mean crypto is dying. Paradigm is explicitly maintaining its crypto portfolio and continuing to make new crypto investments. But the era of crypto-exclusive mega-funds may be ending. The firms that raised $1 billion or more purely for crypto in 2021 and 2022 are all, to varying degrees, looking at adjacent sectors.
For builders, the message is clear: the next billion-dollar crypto protocol probably needs an AI story, or at least an AI-adjacent thesis, to attract top-tier venture backing. Pure infrastructure plays and "another DEX" pitches face a higher bar when the biggest check-writer in the room has a robotics deal on the other side of the table.
FAQ
How much is Paradigm raising for its new fund? Up to $1.5 billion, targeting artificial intelligence, robotics, and other frontier technologies. The firm will continue making crypto investments alongside the new mandate.
Is Paradigm leaving crypto? No. The firm maintains $12.7 billion in assets under management, the majority in crypto-focused funds. Co-founder Matt Huang described the expansion as additive, saying crypto and AI "will have plenty of overlap."
What is agentic payments? Agentic payments refer to transactions executed by autonomous AI agents without human intervention. These agents would use blockchain-based rails, particularly stablecoins, to pay for compute, APIs, and services in real time.
How much venture capital went to AI in 2025? AI firms received $258.7 billion in venture investment, accounting for 61% of all global VC funding, according to OECD data. That share doubled from 2022.
Overview
Paradigm, crypto's largest native venture firm with $12.7 billion in AUM, is raising up to $1.5 billion for a new fund focused on AI, robotics, and frontier technologies. The move follows a year in which AI captured 61% of all global venture capital. Paradigm will use its existing team to evaluate deals across both crypto and frontier tech, raising the bar for pure crypto investments. The firm sees agentic payments, where AI agents transact autonomously on blockchain rails, as the natural bridge between its two investment theses. Paradigm is not exiting crypto, but the decision to raise a separate, larger-than-its-last-crypto-fund vehicle for AI signals where the marginal venture dollar is heading.
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