Web3 is dead, because the VC valuation multiplier switched from "blockchain-native" to having an "AI story", so startups don't have to pretend to care about data-sovereignty anymore.

Developers want to use Postgres, not a distributed ledger. And most end users don't really care about data-sovereignty. If I thought a significant percentage of my app's users did, I would much rather rewrite to conform to ATProto than touch anything on the blockchain.