The AI agents market has taken a notable blow recently, with its market capitalization plummeting over $2.5 billion within the last day. This setback has dropped the total market cap from about $12.9 billion to just above $10.2 billion, as reported by cookie.fun.
CoinGecko echoes these alarming figures, revealing that the market’s total cap now rests at $10 billion, marking a sharp decline of 19% in a very short time frame.
DeepSeek’s Impact
Much of this downturn can be traced back to the emergence of DeepSeek, a Chinese language model (LLM) that has quickly gained a foothold for its impressive cost-efficiency and superior performance when compared to industry giants like OpenAI, Google, and Meta.
What makes DeepSeek stand out? Its strikingly low price of just 14 cents per million input tokens sharply contrasts with OpenAI’s GPT-4, which charges $15 for the same amount. This vast difference in pricing has led many investors to reconsider their stakes in AI-related assets, creating ripples that can be felt across both the tech and cryptocurrency sectors.
Market Reactions
The fallout from this pricing revolution has hit many notable AI agents hard. AIXBT’s valuation has plummeted by 18.5%, while the ai16z framework dropped by 24%. The Virtuals AI creation platform saw a decline of 14%, and GRIFFAIN suffered an alarming 25% decrease in a single day.
In the world of AI-driven cryptocurrencies, Fartcoin faced the steepest fall, plunging 31% as per CoinGecko’s data. Other tokens within the AI crypto domain also experienced losses; Near Protocol shrank by 10%, Internet Computer dipped 7%, Render lost 14%, and the Artificial Superintelligence Alliance fell by 10%.
Financial Fallout
On the stock market front, the Nasdaq composite index slid by 3.6%. Nvidia’s shares took a significant hit, dropping almost 20% to $118 during mid-morning trading.
This decline arrives shortly after former President Donald Trump announced ambitious plans for the U.S. to take the lead in AI and cryptocurrency. His administration aims for a $500 billion investment in Project Stargate, which will bolster OpenAI’s initiatives and ensure the U.S. remains at the forefront of AI advancements.
Despite these hefty investments, DeepSeek’s rapid success—achieved with minimal resource demands while outperforming pricier alternatives—signals a likely pattern of ongoing disruption in the marketplace.
In a remarkable turn of events, DeepSeek has surpassed ChatGPT in popularity on the Apple App Store within just a week. Additionally, it has attracted more search interest in the U.S. than OpenAI, reinforcing its swift rise in the fiercely competitive realm of artificial intelligence and natural language processing.
Source: Cryptobriefing
