AI Altcoins Plummet 10% as Chinese Models Challenge OpenAI

Coin WorldMonday, Jan 27, 2025 1:37 am ET

1min read

The cryptocurrency market has witnessed significant fluctuations in the past 24 hours, with a notable decline in the market capitalization of AI-related altcoins. According to data from CoinGecko, the AI sector's market capitalization has dropped by 10.4%, with certain altcoins experiencing even steeper declines.

For instance, RENDER has dropped 10.4%, trading at $6.28, while VIRTUAL has seen losses of 18.3%, currently priced at $2.05. Additionally, GRIFFAIN fell 25.7% to $0.3094, and ARC reported a decrease of 27.1%, now valued at $0.2631.

The downturn in AI-related cryptocurrencies is attributed to the launch of two large models, DeepSeek-V3 and DeepSeek-R1, by the Chinese startup DeepSeek. These models are positioned as direct competitors to major players like OpenAI, offering superior performance at significantly lower costs. Market analysts express concerns over the potential impact of these developments, leading to drops in US stock index futures during early Asian trading sessions.

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