DeepSeek Shakes the AI Market: Crypto and Stocks See Downturns

The AI cryptocurrency market has taken a hit, losing 9.3% of its value in the past month. It now stands at $44.82 billion

The AI cryptocurrency market has seen a downturn, losing 9.3% of its value over the past month and now standing at $44.82 billion, as investors react to the arrival of DeepSeek, a more affordable AI model from the Chinese market.

Major AI-focused tokens have seen a downturn, with RENDER, Virtual Protocol, FET, and INJ suffering heavy losses over the past week.

DeepSeek, developed by High-Flyer, a Chinese quant trading firm, has challenged the AI industry giants with its low development cost of just $6 million. This is a stark contrast to the billions spent by OpenAI and Meta on large-scale AI models, naturally raising concerns about the long-term sustainability of current AI projects.

Some AI cryptocurrencies attempted a short-term rebound but remain in a downward trend over weekly and monthly time frames. FET is currently trading at $1.05, showing a minimal 1.5% rise in the past day. However, it's down 15.6% over the past week and 17% over the past month.

Some AI cryptocurrencies attempted a short-term rebound but remain in a downward trend over weekly and monthly time frames. FET is currently trading at $1.05, showing a minimal 1.5% rise in the past day. However, it's down 15.6% over the past week and 17% over the past month.

Meanwhile, Virtual Protocol has yet to recover, gaining a paltry 0.7% in the last 24 hours to reach $2.00, but it has remained down 24.9% for the week and 50.9% over the past month. On the bright side, it still boasts an impressive 3,986% year-to-date growth, making it one of the top-performing tokens in the period.

Render shows a positive sign of recovery as it boasts a 3.0% daily gain to trade at $5.90. Still, its price is well off the mark in the past week, having dropped by 17.8% and 12.6% in the past month.

Despite these minor price recoveries, with the AI crypto market cap rising by 1.2% over the last day, AI tokens continue to face downward pressure as investors reassess their viability in light of DeepSeek’s emergence.

The impact of DeepSeek isn't limited to cryptocurrencies. Shares of major AI companies, including NVIDIA, Microsoft, and Meta, also declined in pre-market trading.

NVIDIA saw an 11.46% drop on January 27. The stock has fallen 15.91% in the past five days, currently at $124.65. This reflects broader concerns about the AI industry’s future profitability.

With scrutiny growing over costs and revenue growth, investors are becoming skeptical about whether AI-related crypto projects can deliver long-term value.

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