The post DeepSeek Causes Crypto Market Crash: AI Tokens Experience Sharp Decline appeared first on Coinpedia Fintech News
DeepSeek, a cost-effective AI model developed by Chinese AI Lab under the leadership of Lian Wenfeng, has badly disrupted the US AI sector, dominated by expensive AI models. In the last 24 hours alone, the total market cap of the AI coins segment has dropped by around 11.5%.
Almost all the top five AI coins have experienced this downward pressure. NEAR has slipped by 10.8%, ICP by 8.3%, Render by 12.6% and FET by 9.7%.
DeepSeek uses fewer GPUs compared to OpenAI. Using fewer GPUs is vital as it makes AI models more cost-efficient. It also makes models more energy efficient. Importantly, it makes them highly accessible.
Why DeepSeek Concerns GPU-Heavy AI Projects
DeepSeek proves that you don’t need expensive GPU setups to create powerful AI models. Most prominent US AI projects, like OpenAI, are GPU-heavy models. If more models like DeepSeek emerge, the demand for GPU-heavy models will naturally decrease. The success of DeepSeek establishes that success depends on innovation and practicality, not just big budgets.
GPU-Heavy Tokens Bear the Brunt
In the last seven days, NodeAI has seen a fall of 37.2%; in the last 24 hours alone, the token has slipped by 22.9%.
Similarly, Aethir has experienced a drop of 17.2% in the last seven days; the token has declined by over 8.8% in the last 24 hours alone.
GamiFi: Declining Investments and User Base Struggle
Analysts compare the decline of the AI sector with that of the GameFi sector. They believe that both the sectors face almost similar problems. Some highlight the inability of crypto games to match the performance of traditional games.
Reports say that investment in the GameFi segment dropped to at least $1.8 billion in 2024. The GameFi sector has recorded a decline of 9.2% in the last 24 hours.
During the period, almost all the top five GameFi tokens have experienced this downward pressure; IMX has plummeted by 12.1%, SAND by 11.4%, GALA by 15.1%, AXS by 11.1% and FLOKI by 13%.
In conclusion, DeepSeek’s innovative approach challenges the dominance of GPU-heavy models in AI and raises questions about cost-efficiency and innovation. Similarly, the GameFi sector faces its struggles as investments and user engagement drop.
These developments emphasise the importance of sustainable innovation for both AI and blockchain gaming sectors to thrive in the evolving tech landscape.
