Kite AI raises $18 million in Series A to build decentralized infrastructure for AI agents in Web3

Kite AI, a decentralized AI infrastructure provider, has raised $18 million in its Series A funding round, bringing its total funding to $33 million. The round was led by PayPal Ventures, with participation from notable investors like 8VC, Samsung Next, SBI US Gateway Fund, Vertex Ventures, Hashed, HashKey Capital, Avalanche Foundation, LayerZero, and Animoca Brands.

Building decentralized infrastructure for AI agents

Launched in February 2025, Kite AI is focused on enhancing scalability and data processing for AI workflows through its AI-centric layer-1 blockchain, which is built on Avalanche (AVAX). The company aims to provide a decentralized infrastructure to support agentic AI, a new class of autonomous software programs in the Web3 ecosystem. These agents can perceive their environment, make decisions, and act independently to achieve goals without human intervention.

Introducing AIR for AI agent transactions

Kite AI has launched AIR, a system designed to enable AI agents to authenticate and transact independently using programmable identities, stablecoin payments, and policy enforcement. AIR consists of two main components:

1. Agent Passport – Provides identity services and operational guardrails to ensure trust and security.
2. Agent App Store – Offers AI agents access to custom services, data sources, and commerce tools, and facilitates transactions for these services.

A Kite representative explained that the Agent Passport creates a multi-layered identity system for participants, ensuring that every action is cryptographically traceable back to its origin. This system fosters trust and security for AI transactions.

AI agents as the future of Web3’s user interface

Chi Zhang, Kite’s co-founder and CEO, believes that AI agents will be the dominant user interface in future digital economies. He pointed out while talking to Cointelegraph that current human-centric systems are not designed for the micro-transactions performed by AI agents at machine speed. For AI agents to function effectively, they need access to structured and verifiable data, something Kite is working to provide.

Zhang also noted that businesses using APIs like PayPal or Shopify can opt into Kite’s Agent App Store to become discoverable by AI shopping agents. These AI agents can facilitate purchases that are settled onchain with stablecoins, ensuring transparency and efficiency in transactions.

PayPal and Shopify partnerships

Kite AI is currently in pilot phases with PayPal and Shopify. Alan Du, a partner at PayPal Ventures, lauded Kite as the first real infrastructure that is purpose-built for the agentic economy. He emphasized that the payment gap for AI agent systems particularly in terms of stablecoin-based settlement is a critical challenge, and Kite bridges this gap with millisecond-level settlement.

Steve Everett, head of global market development at PayPal’s crypto and digital assets department, remarked that such infrastructure enables a global, automated economy where humans, enterprises, and machines can interact with ease and trust.

Growing expectations for AI agents in Web3

The interest in AI agents capable of handling crypto transactions and interacting with Web3 is gaining momentum. According to Coinbase development team members, AI agents are poised to become Ethereum’s biggest power users in the near future.

However, the challenges in building systems that allow AI agents to interact effectively with other Web3 infrastructure remain significant. Adrian Brink, co-founder of Anoma, a Web3 AI agent infrastructure firm, argued that such systems need to be built on intent-based blockchain infrastructure. This allows AI agents to interpret user-defined goals and autonomously execute necessary actions and transactions.

Real-world adoption of AI agents

Some AI-agent-based systems are already seeing significant adoption. Clanker, a decentralized application (DApp) using AI agents to create memecoins based on user prompts, has generated over $34.4 million in fees for its users. The DApp automates the deployment, market creation, and fee-sharing processes, demonstrating the potential of AI agents in the crypto space.