Hugh Forrest at Opening Session: Explore Space & Poetry With NASA & Poet Laureate Ada Limón as part of SXSW 2024 Conference and Festivals held at the Austin Convention Center on March 8, 2024 in Austin, Texas. (Photo by Hutton Supancic/SXSW Conference & Festivals via )

When you’ve been to SXSW a few times, you come to expect and even look forward to the hype. After all, this celebration of innovation would be pretty pale if it didn’t provide puff, promotion, and even what some might term propaganda.

Predictably, ‘AI’ was the buzzword on everyone’s lips this year, but behind the starry-eyed presentations, you could detect a note of doubt; you could hear the faint whisper of realism beginning to creep into the conversation.

My key takeaway from SXSW 2024 was that innovators and developers are beginning to see beyond the hype they helped create. They are now focused on identifying and harnessing technologies that can safeguard against the dangers and errors within AI and which are rapidly coming to the public’s attention. As attendees learned, this is a unique opportunity for the nascent decentralization and Web3 industries.

AI starts to lean on other tech like Blockchain

In Austin, you could tell the mood was beginning to change. This was best summed up by Authentic CEO Mike Nellis, who pointed out (not without irony): “Everybody who was an expert in crypto two years ago is an expert in AI right now.”

Cynicism aside, it’s obvious that the hype around AI is beginning to be tempered with a realization that these incredible advances create a host of problems that must be fixed before we unleash their full power on humanity. The last year has seen huge advances in everything from the Metaverse to AI-powered chatbots, and that places much-needed focus on how to protect data ownership in the online realm.

These concerns are fueled by stories like the Princess of Wales’ admission she’d edited a family photograph released to the press, which made headlines around the world. Closer to home, deep fakes and fake news are already dominating the narrative around the US presidential election. We’ve already seen a host of doctored recordings involving both candidates – from Trump posing with black ‘supporters’ to the infamous Biden ‘robocall’ mystery.

Yagub Rahimov, founder and CEO of Polygraf, summed up the mood when he told me, “AI is long past the infant stage and is starting to experience its first growing pains. With any technology this exciting, this transformative, of course, the enthusiasm of its developers is going to outpace considerations of ethics and safety—but those conversations can’t be ignored a moment longer. That’s why we built Polygraf as an on-prem AI governance solution eliminating data leakages and enabling users to identify sources of AI generated digital content in real-time.”

Start-ups are still the heart of innovation

An entrepreneur focus is the heart of SXSW for all the years that I have attended. Many innovation and startup competitions abounded, including the one that was formerly sponsored by SXSW. But there were a lot of competitions for specific focused areas.

The AI Trailblazers, founded by Greg Kahn, Shiv Singh, and Amit Shah, hosted the AI Showdown—a highlight event showcasing the pinnacle of AI innovation by leading start-ups in the field. Out of over 100 AI startup contenders, five exceptional finalists emerged to pitch their transformative ideas.

These finalists presented to an esteemed panel of judges, including Bonin Bough, Chief Strategy Officer of Group Black; Jennifer Prince, Chief Commercial Partner of the Los Angeles Rams; Jeremiah Owyang, General Partner at Blitzscaling Ventures; and Sandy Carter, Chief Operating Officer at Unstoppable Domains. Their diverse projects spanned from Atomo Health’s deep healthcare insights to Polygraf.ai’s content verification, Rembrand’s video advertising innovations, TheWordsmith.ai’s content production efficiencies, and Zenus.ai’s ethical facial analysis.

Atomo, led by Kelly D Myers, emerged victorious, showcasing the profound impact of AI in healthcare. Myers expressed his gratitude, stating, “We’re deeply honored to have won the AI Showdown among such an incredible lineup of innovative startups. This victory underscores the critical role of AI in transforming healthcare—making it more intuitive, accessible, and personalized than ever before. At Atomo, we believe that integrating AI into healthcare is not just about technological advancement but about fundamentally enhancing the human condition.” This triumph at the AI Showdown emphasizes the significant role of startups in driving innovation and shaping the future of industries through AI.

Capital chases crypto’s latest bull run

Another inescapable theme this year was crypto’s latest bull run, with the value of Bitcoin and other digital currencies hitting record highs. Especially in the wake of regulatory approval for the first Bitcoin Spot ETF, we’re seeing the first major wave of institutional money pouring into crypto, while venture capitalists are rediscovering their appetite for digital currencies after investments into Web3 projects plummeted by 78% in 2022.

Needless to say, this is great news for the Web3 and blockchain industries. This new investment is crucial for building the applications that will promote widespread adoption.

These use cases are also a great example of platforms and businesses turning to Web3 native providers rather than looking to Web2 for solutions. The beauty of Web3 is that it gives users a real stake in existing communities, as well as the opportunity to build their own. That’s an opportunity no corporation – and no investor – can choose to ignore.

Where are the women?

Once again, SXSW coincided with International Women’s Day, but as usual, there wasn’t a huge amount for women to celebrate. Sure, there’s plenty of noise about empowering female developers and entrepreneurs – but very little in terms of concrete progress.

The truth is, we’ve barely moved the needle on female founders or funding for women-led projects. At SXSW I heard all the old excuses about “it’s always the business case; it’s never personal.” Really? That’s a hard viewpoint to justify, given that a study by Emory University found that ventures with women on the founding teams are 15% more likely to be profitable than those without but 40% less likely to attract equity investments.

And this brings us to another problem with the burgeoning AI industry: lack of representation. To solve this, the industry and its funders must start delivering diversity rather than just talking about it.

We’ve known for years it makes good business sense. Way back in 2018, WayUp CEO Liz Wessel told SXSW that, for every one percent increase in gender diversity, companies see a three percent increase in sales revenue.

And I loved that Andreessen Horowitz (a16z) held a lunch for International Women’s Day focused on female founders. They are a venture capital firm that invests in seed to venture to growth stage technology companies, across AI, web3, healthcare, and more, with $35B in assets under management across multiple funds. The lunch was titled “Read Write Own” after Chris Dixon’s book and featured female entrepreneurs and founders from around the globe.

Maggie Hsu, a partner at a16z, said, “At this year’s SXSW, our lunch focused on female entrepreneurs and founders in web3 and AI. We’re shining a spotlight on the incredible talent and potential of women in these cutting-edge fields. It’s essential that we support and amplify the voices of women leading the charge in technology, fostering an environment of equality, innovation, and success.”

Public + Private Wins the Day

Last year, I described Web3 as still in its ‘dial-up’ phase, and this still stands. According to the findings from the “International Survey of Web3 Adoption” conducted by Coinbase Institute, 30.8% of internet users have engaged with at least one Web3 service in the past. Of these Web3 users, the majority, accounting for 19.4%, have utilized only a single service, while only 5.8% have explored three or more services within the Web3 ecosystem.

Also Public Private partnerships are crucial for our future. With the power of Web3 and AI, governments and companies must work together to drive the innovative future that we need.

This year, SXSW led by example with the debut of .austin – the first city-centric blockchain based Top Level Domain (TLD). This new TLD showcases the power of Web3, providing a secure forum for people to access encrypted chats, provide feedback to the event organizers, discuss education priorities, and much more. (Please note that my company led the partnership with the Greater Austin Asian Chamber of Commerce.)

Mark Duval, President and CEO of the Greater Austin Asian Chamber of Commerce commented, “We are proud to lead the adoption of the .austin domain, with the vision of strengthening the bonds within our community and beyond. This city-centric domain allows people to own a piece of digital identity that advocates their support for our community. We aim to ensure that our members, Austin businesses, residents, and visitors have new ways to celebrate the city’s dynamism and diversity.”

The new .austin domain empowers 2.4m Central Texas residents and visitors to show their love for Austin and personalize their digital identity. It’s a fascinating example of how public entities can protect their brand and engage the public in new, more trusted ways — and the shape of things to come for other major events and forward-thinking cities around the globe.

As Joshua Baer – founder and CEO of Capital Factory, the center of gravity for entrepreneurs in Texas – told me at the event: “Online communities are more than just websites. A real community has stakeholders who are invested in a shared future. That’s what’s so exciting about Web3 in general, and .austin in particular.”

As the sun sets on another SXSW, it’s evident that, beyond the AI hype, a new era of cautious optimism is dawning in the tech sphere. Yet, the persistent lack of female representation underscores the need for a more inclusive approach — one that won’t only help foster greater diversity but better innovation, too.

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