Overview

Artificial Intelligence tokens are suffering significant losses during Monday’s trading hours in Asia. The AI sector on CoinGecko has dropped 9%, while the broader CoinDesk 20 index is down only 5%.

A new player, China’s DeepSeek, is impacting the AI market with its cost-effective model that competes with OpenAI’s offerings, yet is built at a fraction of the cost of $6 million—remarkably less than OpenAI’s recent $6.6 billion funding round. Investors are reacting to how DeepSeek is disrupting the industry as traditional finance counterparts take notice.

Key Details

• Many AI tokens, especially those reliant on GPUs, are struggling, with Nodes.AI dropping nearly 20% and other similar projects facing declines.
• History has shown that despite capital flow, many crypto AI projects failed to innovate as deeply as DeepSeek has, resulting in a familiar frustration akin to earlier disappointments in the crypto gaming sector.

Market Insights

Data suggests the crypto gaming sector is valued at $19 billion, yet it is facing stagnation with investments in blockchain gaming down 38% in 2024 compared to 2023, based on DappRadar.

In conclusion, crypto’s attempts to broaden its use cases beyond financial transactions are challenged, leaving many wondering about the sector’s ability to adapt and thrive as technology evolves.

“Wow DeepSeek R1 version 1.5B runs perfectly locally on my phone 😳 So you can have a model that outperforms GPT-4o and Claude 3.5 Sonnet on math in your pocket.” — Paul Couvert (@itsPaulAi)