Paradigm has raised a $1.2 billion fund targeting artificial intelligence and robotics. The announcement landed July 8 via the firm’s blog, and the reception was predictable: the crypto VC is pivoting, diversifying, hedging its bets.

The more accurate read is simpler. Paradigm is responding to where the deal flow is.

The returns picture

Crypto venture has thinned out. After 2021’s peak – when Paradigm itself raised a $2.5 billion flagship crypto fund, then the largest dedicated crypto vehicle – deployment opportunities at crypto-native valuations have contracted. AI, by contrast, is producing large rounds at scale. Paradigm has already put capital to work: Zipline International, an autonomous drone delivery company valued at…