Deepseek’s Advancing AI Technology Raises Concerns for Competitors
Recent developments in the field of artificial intelligence have triggered a significant stir in global stock markets as Chinese tech company Deepseek makes substantial strides in its AI technology.
Within a span of 24 hours, Deepseek has emerged as a frontrunner in the AI industry in the United States, causing considerable ripples in the country’s stock market.
Reports indicate that Deepseek, a Chinese tech firm, unveiled a cutting-edge large language model (LLM) in December 2024, matching the capabilities of established players like OpenAI despite facing trade restrictions on chip imports.
Just five days ago, Deepseek introduced another LLM that was trained at a fraction of the cost compared to similar systems developed by major tech companies like OpenAI, Google, and Meta.
This cost-efficiency has propelled Deepseek into the spotlight, positioning it as a formidable competitor to industry giants like OpenAI and Nvidia.
Consequently, Nasdaq contracts and shares of Japanese chipmakers have witnessed significant selling pressures, leading to a downturn in key indices such as the NASDAQ composite, Dow Jones, and S&P 500.
Simultaneously, Chinese tech stocks have soared to unprecedented heights as investors increasingly turn their attention towards Deepseek following its rapid ascent.
This trend has sparked concerns about the prolonged dominance of American AI firms, prompting a broad-scale market sell-off as investors respond to the unfolding developments.
Nvidia Stock Decline Impacts AI Coins
While Deepseek and Chinese tech stocks surge, Nvidia has experienced a notable decline in its stock value over the previous day. Currently, Nvidia’s stock is trading at 142.62, marking a 4.62% decrease within a day.
Speculations abound that a prominent Chinese quant fund holds access to 50,000 of Nvidia’s previous-generation H100 AI GPUs, leading to market apprehensions.
The downturn in Nvidia’s stock has had a ripple effect on AI-themed cryptocurrencies, resulting in one of the sharpest declines witnessed in 2025 across all AI-associated coins.
Key players such as Render[RNDR], which closely aligns with Nvidia, have experienced a significant drop of 15.72%. Similarly, other cryptocurrencies have also seen declines, with Injective [INJ] falling by 9.82%, Artificial Superintelligence Alliance [FET] by 11.65%, Filecoin [FIL] by 11.09%, Near Protocol [NEAR] by 12.54%, and Internet Computer [ICP] by 10.75%.
This downward trajectory in AI coins mirrors the broader downturn in the U.S. stock market, affecting the entire cryptocurrency landscape. Notably, major cryptocurrencies like Bitcoin [BTC] have plummeted to a low of $98k.
The Future Outlook for AI Coins
The recent decline in AI coins underscores the intertwined nature of cryptocurrency markets with traditional financial systems. Until these coins can uncouple from the influence of the stock market and industry giants, their performance will likely remain tethered to market fluctuations.