Funding Round for Kite AI
Decentralized AI infrastructure provider Kite AI has secured $18 million in its Series A funding round, which was led by PayPal Ventures, raising its total funding to $33 million.
As per an announcement made on Tuesday, additional investors in Kite include 8VC, Samsung Next, SBI US Gateway Fund, Vertex Ventures, Hashed, HashKey Capital, Avalanche Foundation, LayerZero, Animoca Brands, among others. In February, Kite launched the testnet for its AI-focused layer-1 blockchain that operates on Avalanche (AVAX). This initiative aims to boost scalability and data processing while facilitating centralized management for artificial intelligence (AI) workflows.
Vision for Agentic AI Infrastructure
Kite is focused on utilizing distributed infrastructure to support agentic AI frameworks, envisioning AI agents as a new category of users within the Web3 ecosystem. These AI agents are autonomous software applications capable of perceiving their surroundings, making choices, and taking actions to achieve objectives without the need for continuous human oversight.
Introduction of AIR
Kite has introduced AIR, a system that enables AI agents to authenticate and transact independently through programmable identities, native stablecoin payments, and policy enforcement on a specialized blockchain. AIR consists of two main components: an Agent Passport, which provides identity services along with operational guidelines, and an Agent App Store, where agents can access customized services, data sources, and commerce tools, allowing them to pay for such services.
A representative from Kite detailed that the Passport “creates a multi-layered identity system where each participant—users, agents, and sessions—has distinct cryptographic identities that form a chain of trust.” This design purportedly guarantees that all actions can be cryptographically traced back to their origin.
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Insights from Co-Founders
Kite co-founder and CEO Chi Zhang noted that the team is convinced that autonomous agents will represent “the dominant [user interface] for the future digital economies.” He emphasized the necessity of structured and verifiable data for these agents to operate effectively, stating that this was the initial step. The next phase involves establishing identity, trust, and programmable payments tailored for AI agents.
Zhang mentioned that through publicly available application programming interfaces (APIs), merchants on PayPal or Shopify “can opt in via the Kite Agent App Store and become visible to AI shopping agents.” Transactions made within this ecosystem are settled onchain and are transparent, utilizing stablecoins. The team is also working on further integrations across commerce, finance, and data platforms.
Partnership and Future Insights
In a conversation, a Kite representative clarified that “PayPal is a formal partnership in pilot phase, while Shopify is an API integration also in pilot phase.”
Alan Du, a partner at PayPal Ventures, remarked that Kite represents “the first real infrastructure that is purpose-built for the agentic economy.” He added that payments pose a significant technical challenge for AI agent systems, and “Kite bridges this critical gap by offering stablecoin-based, millisecond-level settlement.”
Steve Everett, head of global market development at PayPal’s crypto and digital assets division, expressed that such systems facilitate “a truly global, automated economy where people, enterprises, and machines can engage effortlessly and trustfully.”
Growing Interest in AI Agents
Interest in AI agents capable of conducting cryptocurrency transactions and engaging with Web3 is continually rising. Members of the Coinbase development team, Kevin Leffew and Lincoln Murr, recently stated that such agents are poised to become Ethereum’s “biggest power users.”
However, the way AI agents interact with other systems is fundamentally different from human interactions, and their capabilities vastly exceed those of the average individual. Thus, significant efforts are underway to develop specialized infrastructure and middleware that enable AI agents to interact with complex systems, including Web3 infrastructure.
Adrian Brink, co-founder of the Web3 AI agent infrastructure firm Anoma, recently argued that these systems necessitate intent-based blockchain infrastructure. Here, intents refer to user-defined objectives or desired outcomes articulated at a high level, which the blockchain and agent systems can interpret and execute by automatically deciding the required actions and transactions.
Adoption in Web3
Some AI-agent-based systems are beginning to experience widespread adoption in Web3. Recent data indicates that Clanker, a decentralized application (DApp) centered around an AI agent that generates memecoins based on user prompts, has produced over $34.4 million in fees for its users.
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“Clanker is an AI that launches crypto tokens for you,” states the DApp’s website. “Just provide a name and symbol, and it automates deployment, market creation, and fee sharing.”
