TLDR: AI NFTs are non-fungible tokens (NFTs) that are generated using artificial intelligence (AI) technology. Artists and creators can employ AI algorithms, or generative AI models, as they would any other physical instrument like paintbrushes, pencils or chalk to create entirely new forms. AI NFTs can include photo-images, sculptures, music, paintings and/or poetry. Thanks to AI, artists can create novel works of art, and then use blockchain technology to turn their works into NFTs and sell them on a public marketplace as immutable, verifiably authentic pieces.   

Before diving down the Artificial Intelligence (AI) rabbit hole, it might be useful to contextualize non-fungible tokens (NFTs) and their tremendous impact on the art world over the past three years. NFTs have become ubiquitous with traditional art forms and as a medium itself, as digital art in the form of an NFT becomes a unique asset. 

Traditionally having been used within the art market as a mechanism to prove authenticity of a digital piece, NFTs’ applicability in the art world has exploded, along with the market, which boasted approximately $24.7 billion in trading volume across different platforms in 2022.

Now, onto AI ...

How AI works to create art 

All AI art starts with machine learning as a fundamental process, in which algorithms are trained to analyze and interpret different datasets and deliver corresponding outputs based on respective inputs. After extensive analysis, models can generate increasingly accurate and novel outputs based on the inputs provided by the user, or in this case, artist. 

Most AI art models include natural language processing technology (NPL) which is used to interpret text requests to generate artwork. However, models can come in different forms. One example is a generative adversarial network (GAN), which is designed after human neural networks and generates novel images after learning to copy massive datasets. Another type of AI model is the convolutional neural network (CNN), which performs classification and recognition tasks on available data, and filters out specific features that appear within the confines of an existing image.

Thankfully, you don’t have to be a machine learning expert to craft an AI NFT. Tools like MidJourney and Generative Fill (embedded within Adobe Photoshop) have gained tremendous traction for artists looking to experiment with AI art creation. There are also a number of tools that allow you to generate and sell AI art as NFTs, including: StarryAI, HotpotAI, and DALL-E-2

How pioneering artists view AI NFTs

While AI art is not universally accepted among artists, some consider AI NFTs to be a beautiful coalescence of technology and inspiration. According to artist and brand strategist Anna Vargas, AI can act as the artist’s paintbrush, while blockchain acts as the artist’s signature and authentication of value.  

Vargas, who began her journey as an NFTs collector while she was in treatment for breast cancer, describes AI NFTs as a form of community-driven storytelling: “I quickly became part of storytelling projects by other artists like @salvalorr and @korusworlds," she told BFF. "I got back into illustrating as part of my healing journey and began to play around with some of the AI technologies to create art.”

For Vargas, AI art is collaborative, inviting artists to riff in new ways. "It's like when your mom is telling a story but you add parts to the story from your imagination," she explained. "Or if you hear a song on the radio and you make up your own lyrics to go with the beat of it”.

Intelligent NFTs powered by AI

Beyond stunning images and video generation, AI can also embed NFTs with interactive abilities, sort of like a cartoon chatbot.

Alethea AI, the company behind intelligent NFTs (iNFTs), is pioneering the exploration of NFTs powered by large language models (LLMs), a type of algorithm that distills massive data sets to produce realistic-sounding language when prompted.

According to Komalika Neyol, Alethea AI content manager, an NFT holder can mash up their NFT with the company's proprietary LLM, known as an "intelligence pod." These pods are AI assets that can be trained to have a personality and even perform AI services. These iNFTs are customizable to a person's unique dataset, which gives holders the ability to showcase their personalities through their AI avatars. Check out the interactive tutorial on Alethea's website and view a short video on how to imbue an NFT with AI.

Concerns and criticisms—and where blockchain enters the chat

AI exists not without its critics and critiques. Artists, collectors and experts who operate in the traditional art space frequently boast ethical concerns surrounding the authorship, copyright and originality of AI art. Take comedian Sarah Silverman's lawsuit, for instance, in which she sued OpenAI and Meta and alleged the companies trained their AI models on scaped materials that included her copyrighted book.

What most public discourse misses, however, is that blockchain could provide a complement to ameliorate these concerns. NFTs live on a public ledger, allowing their ownership and authenticity to be verified. This signals a clear alignment between the power of AI to create art, and the power of NFTs to authenticate it. 

One final concern surrounding the creation of AI NFTs is that of bias and discrimination. AI is only as representative as the data it has studied. As a result, the models themselves must learn to generate art that is reflective of the whole, rather than stereotypical archetypes.

Vargas says she has has dealt with AI bias first-hand: “The fact that right now I have to explicitly tell MidJourney to deliver a diverse woman, or Latina women, is part of the systemic bias that the AI was trained on," she said. "If I don’t offer that clarification to MidJourney, it will automatically generate all very thin, white women for me.”

Despite the current lack of diversity, Vargas believes greatly in the future of AI NFTs as an inclusive medium and as a larger renaissance of digital art and culture. “I’m excited for [AI] to be trained with artists like me who try to access media not seen in traditional media or traditional stock images," she said. "I’m personally using it to create more diverse images with people that I wanted in images, such as Latinas”. 

With AI, some speculate generative NFTs will become less biased — yet the proof has not yet manifested on a mass scale.

Learn More About The Artist: View Anna's HUG Creator Profile

Isabel Doonan is the CEO and cofounder of Girls Gotta Eth and Sacreage, a Web3 startup working to expand tooling for crypto philanthropy. With a background in Fintech and ESG, she is deeply passionate about the intersection of blockchain and climate funding, as she works to build a better, more equitable future in which everyone can participate in philanthropy.

This article and all the information in it does not constitute financial advice. If you don’t want to invest money or time in Web3, you don’t have to. As always: Do your own research.

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