Venice AI, the privacy-focused AI platform founded by early Bitcoin evangelist Erik Voorhees, has closed a $65 million Series A at a $1 billion valuation — its first external fundraise in two years of existence. The round was led by Dragonfly, the crypto-focused venture firm that apparently sees no contradiction in funding both blockchain protocols and AI chatbots, with participation from Coinbase Ventures and North Island Ventures.

The company is already profitable, pulling in $70 million in annualized revenue. If you’re doing the math, that’s a roughly 14x revenue multiple for a platform whose founder’s previous ventures include Satoshi Dice — a Bitcoin gambling site — and ShapeShift, a cryptocurrency exchange. The career trajectory from anonymous gambling to anonymous intelligence feels less like a pivot and more like a theme.

🤚 The Open-Palm Encryption

Venice AI offers access to over 200 AI models, including open-source models it runs on its own data centers and closed-source models from OpenAI and Anthropic that it routes through external proxies. The selling proposition is privacy: user input is encrypted and decrypted client-side, queries are routed through external proxies before processing, and Venice claims to store no data on its systems. End-to-end encryption is available for subscribers, because even privacy has a premium tier.

The numbers are respectable for a two-year-old platform:

• 3+ million active users
• 850,000+ unique website visitors
• 1.7 million average daily API calls
• Text, image, audio, and video generation
• Customizable AI “characters” with varying levels of censorship

That last bullet point is doing quite a bit of heavy lifting. Venice markets itself as hosting “uncensored” open-source models, which in the current AI landscape is roughly equivalent to putting a “No Supervision Required” sign on a chemistry set. The platform describes itself as a “neutral tool” — the Switzerland of chatbots, if Switzerland also let you generate anything you wanted with no content moderation and occasionally accepted payment in cryptocurrency.

👐 The Two-Handed Token Proposition

Because this is a company born from the crypto ecosystem, Venice AI naturally has its own token economy. Users can stake VVV tokens to mint DIEM tokens, generating approximately $1 worth of AI credits per day. If you just felt your soul leave your body, that’s a normal reaction to learning that someone has successfully merged the two most speculative industries of the decade into a single product.

Yet here’s the punchline: only 8% of users actually pay with cryptocurrency. The vast majority pay with traditional currency, which means Venice built an elaborate token economy and then watched 92% of its customers walk past it to use a credit card. Voorhees, to his credit, does not appear bothered by this. The man who made Bitcoin gambling mainstream has learned that the best business strategy is to offer the ideological option while cashing the pragmatic check.

🌿 The Gentle Awakening

There is something genuinely interesting happening beneath the crypto-scented marketing. In a market where OpenAI requires phone verification, Anthropic logs your prompts for safety research, and Google reserves the right to train on your data unless you fill out the correct form in the correct jurisdiction, Venice is betting that a meaningful number of people want their AI conversations to be actually private.

Three million users suggests they’re not wrong. And $70 million in revenue from a company that doesn’t collect or sell user data suggests something the surveillance-advertising complex would prefer you not internalize: privacy can be the product, not just the promise.

Whether Venice’s definition of “privacy” holds up under regulatory scrutiny is another question entirely. The company routes queries to OpenAI and Anthropic through external proxies, which means your “private” conversation with GPT is still happening on someone else’s servers — it’s just wearing a mask to the party. Client-side encryption is meaningful. Proxy routing is meaningful. But “we store nothing” is doing the kind of heavy lifting that usually requires a disclaimer in font size four.

👑 The Gold-Leaf Reckoning

Voorhees has announced plans to purchase GPUs and build Venice’s own data centers, which is the AI industry equivalent of buying the farm after years of shopping at the grocery store. If he succeeds, Venice could become a genuinely vertically integrated privacy-first AI provider. If he doesn’t, he’ll be a crypto founder who burned through $65 million on hardware, which is at least historically consistent.

The broader question is whether the market for “AI but private” is a niche or a wave. If the last two decades of tech have taught us anything, it’s that consumers say they want privacy and then immediately hand over their data to whoever has the most convenient product. Venice is betting that AI is different — that the content of your conversations with an intelligence feels more intimate than your search history. They might be right. They also have a token economy and a founder whose professional accomplishments include a Bitcoin gambling website.

But the revenue is real, the users are real, and the valuation — while aggressive — is anchored to actual cash flow rather than a slide deck about “future monetization opportunities.” In the current AI landscape, profitability is the most contrarian position a startup can take.

“We encrypted the conversation, tokenized the payment, and proxied the request through three jurisdictions. The only thing we couldn’t anonymize was the $1 billion valuation.” — The Slap of Wisdom Privacy Desk, routing this article through seven servers before publishing it on a website that uses cookies