TAO cryptocurrency rallied following Covenant-72B model training success on Bittensor's distributed network, but the underlying thesis may be flawed.

TAO cryptocurrency rallied following Covenant-72B model training success on Bittensor's distributed network, but the underlying thesis may be flawed. While decentralized AI training achieved a technical milestone, competing with frontier closed models remains unlikely due to infrastructure constraints that centralized systems inherently solve. However, inference workloads present genuine opportunity. Bittensor's Chutes subnet demonstrates measurable cost advantages over centralized cloud providers on open-model inference tasks. The distinction matters significantly for TAO's long-term value proposition. Distributed inference aligns with network economics, while training faces structural headwinds from physics and market dynamics. Investors should reassess which use case actually drives sustainable demand for the protocol's services.