AI Artwork and the future of NFTs

NFTs didn’t reach $17.6 billion in total sales in 2021 because they’re the highest quality art in circulation. Rather, it’s because people value their scarcity, prospect their future price, appreciate their proof-of-concept of a new artform, or love th…

NFTs didn’t reach $17.6 billion in total sales in 2021 because they’re the highest quality art in circulation. Rather, it’s because people value their scarcity, prospect their future price, appreciate their proof-of-concept of a new artform, or love the artist who created them. However, a new trend in the art world, AI-generated art, may soon disrupt the multibillion-dollar NFT space.

First, let’s look at how collections of NFTs are created today. In most high-profile NFT projects, artists design multiple classes of varying attributes such as hair color, background color, or skin tone. Then, artists will mix and match these attributes to create a collection of “unique” NFTs, where no two NFTs look the same. This process takes time, (some) imagination, and artistic ability.

However, thanks to recent work by OpenAI, anyone will soon be able to create an infinite number of high-quality procedurally generated NFTs by simply writing a sentence. The technology behind this disruption is called DALL-E 2, which is an AI image generator named after Salvador Dali and WALL-E. It uses GPT-3, OpenAI’s natural language processor, and over 650 million images on the internet to produce its amazing results.

Let’s say you wanted to create an NFT collection called “Digital Chemistry Teddies,” a collection of 10,000 unique teddy bears doing science in a digital art style. You could sketch out your concept, design attributes, and mix and match to form an NFT collection. Or, you could simply type “Teddy bears mixing sparkling chemicals as mad scientists as digital art” into DALL-E 2, and here’s what you’d get:

A few computer-generated images of chemist teddy bears.

Not only are these images higher quality than most NFTs I’ve seen, but they’re also unique, infinitely reproducible, and verifiably awesome!

Now, let’s try a prompt more representative of “to the moon” crypto-native tastes: “An astronaut lounging in a tropical resort in space in a vaporwave style.” Here’s what we get:

Vaporwave astronauts lounging in a tropical resort.

The impact of this technology on the digital art world cannot be overstated. What happens to the market when there’s an infinite supply of high-quality generative images & NFTs? I hypothesize that the price of all NFTs other than the first, most valuable, and those created by high-profile artists will go to zero. When AI can create such detailed, colorful, and even beautiful drawings, why do we need someone drawing ape after ape in their mom’s basement?

Regardless of what you think, I know that, instead of paying for the next ape PFP NFT, I’ll instead choose this mad scientist teddy bear or this cyborg Dali!

An AI-generated teddy bear chemist and robotic Dali.

It’s important to note that currently OpenAI explicitly prohibits using DALL-E 2 to create NFTs in its content policy: “you may not license, sell, trade, or otherwise transact on these image generations in any form, including through related assets such as NFTs.” However, if OpenAI doesn’t open its image-generating software for commercial use, I bet another company soon will.

I’ll end this with the response queried from GPT-3 about whether AI-created art will take over in the NFT space:

There is no definitive answer to this question as the NFT market is still in its infancy and is subject to a number of factors that could impact its future. However, AI-created art could take over the NFT if it continues to gain popularity and is increasingly used to create new and innovative artworks.


AI Artwork and the future of NFTs was originally published in Level Up Coding on Medium, where people are continuing the conversation by highlighting and responding to this story.


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