The GMCI AI Index recorded a value of 51.26 on Sunday, up 48% since the beginning of February. However, it is worth noting that the index remains 84% below its all-time high from the first quarter of 2024.

The GMAI index comprises nine tokens with extreme top-heaviness, with Bittensor (TAO), Render (RNDR), and Artificial Superintelligence Alliance (ASI) making up over 71% of the index.

Despite being called a crypto AI index, it is more of a measure of the performance of three large-cap AI infrastructure tokens rather than broader AI crypto sentiment. This composition matters for interpreting the March rally, as the price of TAO nearly doubled in March, and combined with its 24.89% weight, contributed the majority of the index’s appreciation.

The rise in the price of TAO is mostly due to the market catching up to a fundamental realization of what the Bittensor network can demonstrably do.

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Bittensor subnet 3's team announced the Covenant-72B model,  a 72-billion-parameter language model trained permissionlessly across more than 70 globally distributed nodes. The model scored 67.1 on MMLU, a popular benchmark for evaluating the capabilities of LLMs, putting it in a competitive range with Meta's Llama 2 70B.

This showcased the first credible proof that distributed training, which has often been dismissed as too slow and fragmented, can produce models that compete with centralized incumbents. The top subnet token, τemplar (SN3), rallied by over 400% in the last month to a ~$130 million market cap.

This development in the Bittensor ecosystem gained the attention and acknowledgement of notable public figures such as Jensen Huang and Chamath Palihapitiya, which added further narrative fuel to the ecosystem and the TAO token.

The subnet ecosystem beyond Covenant-72B is also maturing, with Targon (SN4), a decentralized GPU compute marketplace operated by Manifold Labs, securing a six-figure deal to power Dippy AI's backend of 8.6 million users.

At the time of writing, there have been over 10.7 million TAO tokens issued, with over 68% staked. The price of TAO stands at approximately $317, with a market cap of just over $3 billion.

This is an excerpt from The Block's Data & Insights newsletter. Dig into the numbers making up the industry's most thought-provoking trends.