DePAI: The Decentralized Physical AI Revolution Shaping Tomorrows Economy

In January 2025, Jensen Huang, CEO of Nvidia, highlighted what he sees as the next phase in the evolution of artificial intelligence. He presented the concept of Physical AI (PAI), a global «brain» for robots and autonomous devices, designed to help machines navigate the real world.

This idea was quickly adopted by figures within the blockchain industry, who proposed a decentralized variant. By February, the analytical platform Messari released a report detailing a new form of interaction between humans, machines, and Web3 known as DePAI. The concept, built upon decentralized physical infrastructure networks (DePIN), and a framework for developing the future «robot economy,» inspired crypto influencer Miles Deutscher, who declared in April that DePAI would be the «biggest trend in cryptocurrency for the next two years.»

During CES 2025, Jensen Huang announced the creation of Cosmos, a platform for developing World Foundation Models (WFM), which aims to revolutionize the construction of physical AI systems, such as robots and autonomous vehicles. Cosmos leverages WFM to simulate real-world conditions, enabling the testing of AI systems in controlled environments that reduce costs and accelerate development.

Huang emphasized the open nature of the Cosmos platform, with its source code available on GitHub. «We genuinely hope that the openness of Cosmos will offer the robotics and industrial AI sectors the same advantages that Llama 3 provided for industrial AI,» he commented.

According to Nvidia, PAI allows autonomous systems—including robots, self-driving cars, and smart environments—to perceive, comprehend, and perform complex tasks in the real world. While large language models (LLMs) like GPT and Llama can generate human language and abstract concepts, they have limitations when it comes to understanding the physical laws governing reality. PAI aims to enhance their capabilities by teaching spatial orientation.

AI-generated 3D data is sourced from high-precision simulations, serving as both a data source and a training environment. This process begins with creating a digital twin of a space, such as a factory, incorporating sensors and robots. As these sensors monitor the dynamics of solid bodies (movement and collisions) or how light interacts with the surrounding environment, real-world scenarios are simulated within the virtual replica.

PAI unlocks transformative potential across various sectors. In robotics, this concept can enhance the performance characteristics of devices used in multiple applications. PAI models receive rewards for successfully completing required tasks, leading to gradual improvements over time. Machines develop complex skills, including precise motoric actions essential for real-world applications, such as careful box packing, assisting in vehicle assembly, or navigating spaces.

The PAI concept was embraced by the crypto community, advocating for blockchain as a solution to centralizing AI. Analyst Dylan Bain, in a February report for Messari, introduced the term decentralized, reshaping the acronym to DePAI—Decentralized Networks of Physical Artificial Intelligence.

DePAI exists at the crossroads of AI, robotics, and Web3. It has the potential to serve as a catalyst for the future economy, where automation is aligned with genuine human needs. What began as generative AI for content creation is now evolving into autonomous agents capable of independent decision-making, pending the integration of efficient «bodies.»

Messari’s DePAI roadmap outlines six primary areas of activity. DePIN projects, such as the geodesic network GEODNET and the alternative to Google Maps Hivemapper, naturally fit into the new DePAI stack. The outputs from such startups may serve as the eyes and ears of robots in the real world, acting as data collection layers.

The startup WeatherXM incentivizes users to set up personal weather stations and upload climatic data in exchange for tokens. Such information can be utilized by devices within the DePAI ecosystem. For instance, integrated systems in smart homes could automatically adjust ventilation or room temperature based on current weather data.

In the robotics sector, the startup Frodobots is leveraging DePIN to deploy low-cost delivery robots globally. These data-driven inputs simplify human decision-making during navigation in real-world scenarios. Gamers can practice operating vehicles in a structured format.

Additionally, there’s Robonomics Network, a company working on creating digital replicas of physical robots on the Polkadot blockchain. It explores the potential to connect robots’ operating systems and IoT devices with blockchain to publish tasks and transfer services via smart contracts.

Blockchain platforms with a focus on DePIN, like Peaq and IoTeX, are establishing machine coordination networks. Their high-speed architecture enables a large number of parallel transactions required for DePAI.

The Posemesh data transmission protocol from Auki is focused on creating a global Spatial Intelligence network, ensuring privacy while facilitating the development of a virtual map for robots. Its functionality extends beyond logistics, also aiding in AI self-learning within simulated environments.

In the realm of investment DAOs, Xmaquina stands out. This project is centered on establishing a structure for collective ownership, management, and development of expensive AI robots, enabling communities and investors to collaborate in funding and advancing technologies, sharing benefits fairly.

In the global economy of machines, DePAI could hypothetically restore power to individuals, currently held by corporations. It is increasingly essential for users to know who owns the technologies, which manufacturer sets the interaction standards, and ultimately, who profits from it.

On April 14, 2025, renowned crypto analyst Miles Deutscher identified DePAI as one of the most significant trends in the industry. An accompanying image to his post illustrates the complex interplay within the DePAI stack, capturing the dynamics reflected in the interactions among the infrastructure participants.

The blockchain team at Peaq, actively involved in advancing DePAI, identifies seven components vital for each autonomous system. While many users of Web3 have encountered or at least heard of most of these elements, the forthcoming machine economy necessitates clarification. By integrating cutting-edge crypto technologies, this model has the potential to yield several beneficial changes.

However, like all emerging technologies, DePAI faces significant challenges that must be addressed before achieving widespread acceptance. Key issues include:

The envisioned future of a human-centric machine economy is undoubtedly enticing and fuels hopes, but whether giants in robotics like Tesla and other corporations will be part of this transformation remains uncertain.

Web3, with its blockchain foundation, may very well be the optimal solution for realizing decentralized AI. At the same time, the DePAI stack clearly delineates the benefits for all stakeholders in future progress, yet only time will reveal who will participate.