AI TRENDS | a16z Frontier: AI Can Replicate Apps, but Web3's Opportunity Lies in Networks

Daren Matsuoka, an investment partner at a16z Frontier, argues that AI's ability to reproduce software shifts Web3's opportunity from applications to reusable networks. According to Foresight News, Matsuoka says AI has driven software development costs close to zero, making it easier for developers to build prototypes and connect them to existing protocols. He says this change revives the potential of crypto concepts such as NFTs, DAOs, decentralized social networks and on-chain games. Their value, he argues, depends on people and AI agents building on shared networks rather than on software alone. Uniswap illustrates composability by allowing new applications to use existing liquidity instead of creating their own from scratch. Matsuoka argues that AI can reproduce application interfaces and APIs, but not the underlying networks' accumulated liquidity, identity, reputation, social connections, history and trust. As software becomes easier to recreate, he says, access to these shared resources becomes more important. A person can generate a wallet or an NFT with AI, but cannot thereby create deep liquidity, an NFT's provenance or its community. He describes blockchains as potential shared state layers for the internet, where ownership, identity, liquidity, reputation and social relationships remain scarce resources. In his view, building reusable networks is a major opportunity for Web3 developers.