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Coinpaprika 2025-01-28 08:44:40

AI Cryptos Drop as Low-Cost DeepSeek Disrupts Market

The artificial intelligence cryptocurrency market has seen a significant decline, losing substantial value within a single day, with its total market cap dropping to $37.4 billion. Key AI coins such as RENDER and VIRTUAL have experienced sharp losses , while FET and INJ have also faced notable declines. This slump comes alongside the rise of DeepSeek, a disruptive $6 million AI model developed by High-Flyer, a Chinese quant trading firm. DeepSeek’s cost-effective approach is challenging the dominance of major AI players like OpenAI and Meta, sparking concerns about the sustainability of existing AI projects. DeepSeek has unsettled confidence across the AI industry. Unlike the massive budgets of its competitors, the model’s efficiency questions the idea that heavy investment ensures market control. The impact is not limited to cryptocurrencies; prominent AI companies like NVIDIA, Microsoft, and Meta are also under scrutiny . NVIDIA , for instance, has reported notable pre-market losses, reflecting growing uncertainty in the AI investment landscape. In the crypto market, most leading AI tokens have suffered steep declines. Despite recent expansion efforts, VIRTUAL failed to avoid its downturn. Meanwhile, TAO has remained relatively stable, showing little movement during the broader sell-off. This trend underscores rising skepticism about the long-term viability of AI-focused cryptocurrencies and projects. Even industry leaders such as OpenAI and NVIDIA are being scrutinized for high operational costs and uncertain revenue prospects. DeepSeek’s emergence has introduced a game-changing dynamic to the AI sector, challenging traditional notions of innovation and funding. As the industry adapts to this disruption, AI-focused cryptocurrencies and companies must reevaluate their strategies to maintain competitiveness.

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