Join Our Telegram channel to stay up to date on breaking news coverage
AI coins, including NEAR, NCP, RENDER, and FIL, saw significant drops of 8-10% today as China’s AI startup DeepSeek challenged US dominance in the sector.
China’s AI startup DeepSeek disrupted the market by creating AI models that cost much less than those of Silicon Valley giants. AI coins decreased sharply during the early hours of Monday’s Asia market. This shift came alongside a sharp decline in Nasdaq 100 futures, which fell 330 points during Sunday’s overnight trading, triggering further panic in the market.
AI Coins Crash: Is There A Reason For The Panic?
The AI coins market has dropped over 7% in the last 24 hours, with the total capitalization for these cryptos falling below $44 billion, according to CoinMarketCap.
The sharp drop is primarily due to the sudden rise in popularity of China’s DeepSeek AI startup, which has shaken the market with its low-cost infrastructure. Built using chips that are a fraction of the cost compared to those used by US AI companies, DeepSeek caused a major market shift.
Despite the current correction in AI coins, experts from the decentralized finance artificial intelligence (DeFAI) market believe it presents a buy-the-dip opportunity. A well-known market analyst, Daniele, believes that DeepSeek will actually drive further growth in the AI Coin industry. “If you’re selling AI coins due to DeepSeek models being cheap and open source, they are actually very helpful to scale AI Apps to Millions of users with low-entry barrier pricing, Daniele said in a Jan. 26 X post. “Is the best thing that could have happened to the industry,” the X user added.
If you're selling AI coins due to @deepseek_ai models being cheap and open source, they are actually very helpful to scale AI Apps to Millions of users with low-entry barrier pricing. Is the best thing that could have happened to the industry.
— Daniele (@danielesesta) January 26, 2025
DeepSeek AI Disrupts Market
The Chinese AI startup has challenged Silicon Valley giants. While companies like OpenAI and Anthropic spend over $100 million on training advanced AI models like GPT-4 or Claude, DeepSeek surprised many with similar results for just $6 million.
Furthermore, DeepSeek uses AI chips that are less advanced than those employed by US companies.
US chip stocks have dropped as the DeepSeek app tops the Apple Store downloads. Companies like Qualcomm, Nvidia, Arm, and Broadcom are down 2-7%, coinciding with the decline in AI coins.
DeepSeek Takes On OpenAI’s Market Dominance
The Chinese AI startup is rapidly gaining attention, ranking as the top free app on the Apple App Store. Users praise the app for being easy to use and running smoothly, with no significant problems from rate limits.
This started a discussion about its possible use in agentic AI systems.
Nvidia, a big tech company, claims Agentic AI is the next big thing in the AI industry, suggesting it could drive many future advancements in the field. DeepSeek’s entry into the market could take some of the overall market share away from OpenAI.
On top of that, last week, OpenAI’s popular product, ChatGPT, suffered a major outage, further fueling discussions.
Related Articles:
- Meme Coin Market And Art Market Share Similar Economics
- Best Wallet Presale Raises $8M
- AI Meme Sector Soars 128%
Newest Meme Coin ICO - Wall Street Pepe
- Audited By Coinsult
- Early Access Presale Round
- Private Trading Alpha For $WEPE Army
- Staking Pool - High Dynamic APY
Join Our Telegram channel to stay up to date on breaking news coverage
