Exclusive: Microsoft-backed Space and Time raises $20 million to merge AI and blockchain

Space and Time previously raised $20 million led by Microsoft M12 Ventures, which also participated in Series A, in September 2022.

“We’re moving into an AI-driven world, which means you don’t know what’s generated by AI and what’s generated by a person or corporations,” Nate Holiday, co-founder and CEO of Space and Time, said wealth in an interview. “We think it’s extremely critical to sit right in the middle of this to make sure that as applications are built in this new world powered by space and time, you have that verifiability, trust and transparency.”

AI x blockchain

Space and Time’s pitch is simple, at least technologically. The promise of crypto is that data can be encoded directly onto blockchains without the need for intermediaries, meaning it cannot be manipulated or misinterpreted, as long as you know how to interact with it and what to look for. When you send a transaction from one Bitcoin wallet holder to another, there is no need for a bank or broker to distort what happened.

AI, in many cases, is the polar opposite. The apps we’re used to, like ChatGPT, are black boxes—we ask them a question and get an output, but we get almost no insight into the process and no way to find out. This means that when the answer is incorrect, there is no way to understand how the agent came up with the possible solution.

At a high level, Space and Time addresses this thorny problem of verifiability. Its technology aspires to ensure that when an AI application provides output, you can confirm where it came from and, ideally, that it’s correct. Holiday argues that the way to do that is through blockchain, which is essentially just a type of database that is theoretically more immune to human interference.

Initially, Space and Time proposed its solution only for blockchain firms, positioning itself as a kind of decentralized version of the Snowflake data storage service. In other words, it would serve as a data store, but unlike other crypto-native solutions like Filecoin, Space and Time would be designed to allow applications to quickly retrieve and access data. This plan has proven attractive to companies building in the world of DeFi, which revolves around financial platforms that need to store massive amounts of user information that requires constant updates, such as loan applications.

Michael Anderson, co-founder of Framework Ventures, said the Web3 Snowflake analog is what initially drew him to Space and Time because he realized the use cases could be expanded. He said the idea now is to take the advantages of blockchain verification and apply it to non-blockchain applications, such as traditional financial institutions, which can use native blockchain tools (namely ZK proofs) to reference cross-referenced to third-party data. such as personally identifiable information (PII). For example, if banks and DMVs are integrated with Snowflake, Space and Time could help banks use DMV data to verify someone’s age without having to store the data themselves.

AI is the next frontier. As AI agents begin to complete tasks for us on the Internet, such as booking flights, they will need to be able to perform transactions programmatically, with rules around credit card usage or data integrity checks. In this future world, Space and Time wants to be the blockchain-native database upon which new applications and the AI ​​agents that interact with them are based.

Of course, with crypto and AI still in its infancy, a lot needs to go right for this type of technology to reach widespread adoption. Still, Space and Time is making enough progress to attract investment from some of the biggest blockchain venture funds, as well as Microsoft, which aims to compete with other so-called hyperscalers like Google and Amazon. Along with its database solutions, Space and Time also uses Microsoft’s generative AI products to build blockchain application development tools available to its customers.

“(Space and Time) has real people building real technology, which especially in the blockchain x AI space, is harder to find,” Anderson said. “When you see entrepreneurs like them coming up, it makes you excited about blockchain.”