The AI coin market just took a nosedive, thanks to a new player on the scene, DeepSeek, a Chinese AI startup that’s shaking things up in a big way.
While top AI coins like Near Protocol, Internet Computer, Render, and Filecoin have plummeted by 8-10%, DeepSeek is making headlines for its low-cost AI models that rival the big names in Silicon Valley.
The meltdown
In the early hours of trading on Monday, AI coins collectively tanked over 7.66%, dropping the total market cap below $44 billion.
This crash is part of a larger crypto market slump, with Bitcoin also struggling to hold its ground around $100K. Investors are clearly in panic mode.
What’s fueling this chaos? DeepSeek’s rise to fame is largely due to its ability to create advanced AI models for a fraction of what U.S. companies spend.
While giants like OpenAI and Anthropic shell out over $100 million for their models, DeepSeek has reportedly achieved similar results for just $6 million. That’s some pretty nuts level of efficiency.
What does experts say? Buy the dip?
Daniele, a well-known market analyst, argues that DeepSeek’s affordable models could actually help expand the AI coin industry by making it easier for developers to scale their applications.
“If you’re selling AI coins because DeepSeek models are cheap and open source, you might be missing out on how they can help scale AI apps to millions of users.”
DeepSeek is making headlines as the top free app on the Apple Store, because users are raving about its seamless performance and user-friendly experience.
This has sparked conversations about integrating DeepSeek into more advanced AI systems.
With its success, it’s clear that DeepSeek is challenging established players like OpenAI and Nvidia.
Market forces
The startup’s approach to using older hardware and open-source technology sets it apart from its competitors who typically rely on expensive resources.
As DeepSeek continues to gain traction, industry leaders are starting to feel the heat. The impact of DeepSeek’s success is being felt across the board.
Major chip manufacturers like Nvidia and Qualcomm saw their stocks drop by 2-7% as investors reacted to this new competition.
With DeepSeek’s rise, analysts are questioning whether U.S. tech dominance can be taken for granted anymore.
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