YZi Labs Invests in USD.AI to Back the Yield-Bearing Stablecoin for Scaling AI Infrastructure

Main takeaways

• YZi Labs has made a strategic investment in USD.AI, a protocol that provides hardware-backed financing for AI infrastructure. 
• The investment aims to accelerate USD.AI's mission to build a new stablecoin that scales alongside global compute demands, allowing every operator to be a hyperscaler.
• USD.AI has already achieved significant milestones, including surpassing $62M in Total Value Locked (TVL) and establishing key collaborations with partners like K3 Capital, Concrete, Euler, and Pendle to create their innovative AutoVaults.

YZi Labs today announced a strategic investment in USD.AI, a protocol that provides hardware-backed financing for AI infrastructure. YZi Labs reinforces its commitment to advancing foundational infrastructure that meets the capital needs of the rapidly expanding AI market.

The AI space is experiencing a massive surge in compute demand, with an expected need for over $6.7 trillion in infrastructure investment over the next five years. This capital-intensive environment has led to a major access problem; a small number of companies are raising staggering sums, while the rest of the market remains structurally underfinanced. For instance, reports have emerged of prominent figures like Sam Altman seeking to design a new financial instrument to raise the missing trillions needed for OpenAI’s own infrastructure buildout.

USD.AI is the creator of a unique financial solution built from the ground up to solve this capital access problem. While traditional financing relies on cashflow projections, USD.AI bases its lending on tangible assets, with each loan backed 1:1 by physical AI hardware. This innovative approach allows for loan closures in under seven days, a major improvement compared to the 60-90 days required by traditional credit funds. This speed can be the difference between scale and stagnation for capital-intensive sectors.

The protocol has already demonstrated strong traction, surpassing a $62M TVL milestone and securing collaborations with leading partners such as K3 Capital, Concrete, Euler, and Pendle to create their innovative AutoVaults for their public launch. These partnerships and achievements highlight the growing demand for a solution that allows for the efficient and friction-free financing of real-world assets like AI hardware.

This funding will allow USD.AI to expand its protocol, onboard new builders more quickly, and support the demand required to bring a new class of financial primitive to market.

“At YZi Labs, we back builders who bridge Web3 rails with real-world demand. USD.ai transforms the challenge of financing AI hardware into a DeFi-native yield product, aligning incentives across depositors, borrowers, and infrastructure providers. What impressed me most is the founders' perseverance and commitment to seeking true PMF and building a commercially viable product, even across multiple market cycles. At the end of the day, it's daring innovators who aim for lasting impact that change the world — and the USD.ai team has that potential.” said Dana Hou, Investment Partner of YZi Labs.

“We’re building a financial primitive for a new class of builders,” said David Choi, co-founder of USD.AI. “Not everyone has a CFO or a Wall Street connection. But they do have machines, and a future to build. This is a dollar that scales for the Wall Street outsiders, and we’re excited to have YZi Labs’ support in our mission.”

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About USD.AI

USD.AI is a yield-bearing synthetic dollar protocol bringing infrastructure finance (InfraFi) onchain. It is backed by overcollateralized compute loans. 

USD.AI enables infrastructure and AI operators to access non-dilutive credit while providing depositors with sustainable, asset-backed yield. Built by Permian Labs, USD.AI is backed by leading investors including Framework, Dragonfly, DCG, Delphi, and Fintech Collective. 

About YZi Labs

YZi Labs manages over $10 billion in assets globally. Our investment philosophy emphasizes impact first—we believe that meaningful returns will naturally follow. We invest in ventures at every stage, prioritizing those with solid fundamentals in Web3, AI, and biotech. 

YZi Labs’ portfolio covers over 300 projects from over 25 countries across six continents. More than 65 of YZi Labs’ portfolio companies have gone through our incubation programs. For more information, follow YZi Labs on X.

Disclaimer:The information provided in this article is intended for informational purposes only and does not constitute investment advice, endorsement, analysis, or recommendations with respect to any financial instruments, investments, or issuers. This article may contain forward-looking statements which are by nature subject to risks and uncertainties. Investment in cryptocurrency and DeFi projects involves substantial risk, including the risk of complete loss. This article does not take into account the investment objectives, financial situation, or specific needs of any particular person and each individual is urged to consult their legal and financial advisors before making any investment decisions.