USDT issuer Tether enters AI: Phone model outperforms larger rivals

Most investors know Tether primarily as the issuer of USDT, the largest stablecoin in the world. However, through investments, the company is also active in many more markets, from gold and agriculture to soccer and media. This week, Tether also made a move into artificial intelligence, with an AI model that is smaller than the competition yet outperforms it.

The model is called QVAC BotPsy and has 800 million parameters – the computational elements that determine what an AI model can do. That is not many, because the largest AI models today run on trillions of parameters.

Nevertheless, in its own tests, BotPsy outperformed Tether models that are up to 2.5 times larger. The model is agentic: it performs tasks on your phone itself, rather than just answering questions.

In one test scenario, an assistant had to send a message, but the Wi-Fi was off and the inbox was full. BotPsy turned on the Wi-Fi and freed up space, while the basic model kept repeating the same unsuccessful attempt.

Under the hood, BotPsy runs on Qwen3.5-0.8B, a small language model from China's Alibaba. Tether further trained that model to control apps and software.

On BFCL v4, a test that measures how well AI selects and executes software functions, BotPsy scored 44.0 percent. The base model stalled at 23.4 percent, so the additional training almost doubled the score. The larger Qwen3.5-2B reached 37.7 percent.

A consumer version of the AI assistant is not yet available. However, developers can download BotPsy for free, customize it, and integrate it into their own apps. In the long term, Tether also wants these AI agents to pay for themselves, using Bitcoin and USDT.

The funding for such projects comes from USDT, which, with a market value of around $176 billion, is far ahead of the competition. Tether mainly earns from the interest on U.S. government bonds that serve as collateral for the currency.

The company invests those profits in a diverse portfolio of holdings. Tether holds a majority stake in the South American agricultural company Adecoagro, a stake in the soccer club Juventus, and a stake of around $775 million in the video platform Rumble.

Even brain technology is on the list. Tether invested $200 million in Blackrock Neurotech, which makes implants that convert brain signals into commands for a computer.

The company also issues Tether Gold (XAUT), a coin backed by physical gold, and USAT, a stablecoin aligned with U.S. regulations.

This spring, a proprietary wallet was added, allowing users to manage their own coins without the intervention of an exchange. It was the first product that Tether offered directly to consumers.

With approximately 143 tons, Tether is also the largest private holder of gold in the world. It also leads the way with Bitcoin (BTC): no other private company has a larger verifiable holding. Around 150,000 coins are on the balance sheet, with a current value of over $10 billion.

Since May 2023, Tether has been buying these coins with up to 15 percent of its quarterly profits. The stack serves as an additional buffer on top of the government bonds that back USDT. Through Twenty One Capital, a publicly traded bitcoin company of which Tether is the largest owner, the company indirectly holds even more coins.