Chinese Low-cost AI Assistant DeepSeek Hits Crypto AI Tokens Hard

The release of Chinese artificial intelligence assistant DeepSeek last week made ChatGPT look weak, and not only did it raise concerns about China's true technological strength, but it also hit unknowing AI tokens in the cryptocurrency market very hard.

Multiple AI-centric altcoins were down Monday as the broader tech financial market grappled with the launch of DeepSeek, which has become the highest-rated free app on the Apple App Store, destroying ChatGPT's record.

DeepSeek's creators claim that the AI chatbot, which OpenAI's Sam Altman has called "impressive," was developed at a fraction of the cost that all other major AI firms around the world had been investing in similar technology.

DeepSeek's claim on low-cost AI assistant development was what truly hit the U.S. tech sector hard, as U.S. President Donald Trump immediately said the startup's model is a "wake-up call" for tech companies in the country to focus on "competing to win."

Multiple AI Tokens Bow the Knee to China's DeepSeek

As news spread about tech stocks being affected negatively by DeepSeek's launch, AI crypto assets also reacted similarly, with many tokens plunging to the red line.

RENDER, the native token of decentralized GPU compute platform Render Network, was down over 4% in the day even as trading volumes were rather high around the coin. RENDER is the fourth largest AI token by market cap on CoinGecko.

AIOZ, the native digital currency of decentralized Web3 AI platform AIOZ Network, bled 2.2% overnight, and Artificial Superintelligence Alliance (FET) was down by 2.5% in the day.

NOS of the decentralized CPU-based DevOps solutions provider Nosana Network shed 6.6%, while Humans.ai's HEART token plunged by nearly 7% in the last day.

TARS AI of the TARS Protocol was among the hardest-hit tokens, bleeding over 9% amid increasing hype and interest around DeepSeek.

Before DeepSeek, many industry experts and analysts projected that the convergence of blockchain and AI will only deepen in 2025 and could be the biggest player among other emerging crypto segments.

Crypto Users Divided Over DeepSeek

The extent of DeepSeek's impact on blockchain and crypto has yet to be seen, but first, there's the Chinese company's intriguing claims and background.

After its launch that rocked U.S. stock markets to the core and raised questions about China's tech capabilities compared to the United States, the AI startup has since limited sign-ups to users with a China-based phone number, citing "large-scale malicious attacks."

For some crypto users, DeepSeek's sudden move of limiting the app's usage within the country is questionable.

Borovik, a prominent figure in the crypto space, said the Chinese AI company "lied about how many GPUs they are using." He also noted how the "crypto sell off was due to us believing the CCP built an AI model 1% weaker than ChatGPT for 95% cheaper."

One user noted that people are just being drawn into the hype around the new model. "DeepSeek is impressive, but like everything else that's made in China, there's more to it than meets the eye. They cut corners," the user wrote.

Others are more optimistic, with some saying the new AI product will only "speed up the timeline for quality agents and agentic enterprises" within the crypto-AI scpace.

There are also some who believe DeepSeek will only strengthen the synergy between blockchain technology and AI, especially in chains where innovation is thriving significantly.