It’s part of a broader and grim crash from the sky-high peaks of tech’s pandemic bonanza when investors poured cash into startups like there was no tomorrow, valuations rocketed, and unicorns popped up left, right and centre. Last year was all about AI, with $17.8 billion pumped into the sector, according to Dealroom.

For those who came in late, Web3 is the name for a “new, better” internet that uses blockchains, cryptocurrencies, and NFTs to give power back to the users. Instead of a web run by big tech companies, Web3 is built, run, and owned by its users. Web3 is read/write/own, not just read/write.

Though some are still sold on Web3’s future, doubts remain over hurdles, like how the technology can reach a massive user base like today’s most prominent tech firms.

UC Berkeley business and law professor Jillian Grennan said she had not seen a company that screams, ‘This is what’s going to get people on board.’

Web3 startups fail to get the investment that shows they are game-changers as AI steals the show and the dough.

Part of the problem is that Web3 is hard to define, and Grennan says that people may have lost their appetite for digital worlds after getting sick of Zoom.

On top of that, there’s the question of how to regulate crypto - a vital part of the Web3 world - which may have put off investors.

Interest rate hikes and the inflated startup valuations of 2021 have meant VCs can’t just back exciting ideas.

The sector is transitioning from chasing growth and trying to grow at all costs to investing in the growth.

Another issue is that the tech is hard to use and needs to be before people stick around.