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Despite the short-term decline in AI tokens, the ongoing developments in the AI sector are expected to fuel a long-term surge in AI-related cryptocurrencies.
Major artificial intelligence-related cryptocurrencies have experienced drops following Nvidia’s second-quarter earnings report. Despite the company’s impressive financial results, which surpassed analysts’ expectations, the market reaction was mixed.
Nvidia’s earnings, released on Wednesday, reported a remarkable performance, with the tech giant raking in $30 billion in revenue for the quarter — a 122% increase compared to the same period last year. Earnings per share (EPS) also saw a substantial rise of 168% year-over-year, reaching $0.68.
These figures exceeded Wall Street’s predictions, which had forecasted $28.72 billion in revenue and $0.64 per share in earnings. The surge in Nvidia’s revenue was primarily driven by the growing demand for its AI products and services.
AI Tokens Fall
However, the earnings report did not resonate well with investors, leading to a decline in the prices of AI-related cryptocurrencies. Artificial Superintelligence Alliance (FET) saw a sharp drop of approximately 7.8%, falling to $1.1663 shortly after the earnings release. Although the token has since recovered slightly, it remains down by 1% over the past 24 hours, according to data from CoinMarketCap.
Similarly, Bittensor (TAO) experienced a 4.5% decline, trading just below the $300 mark, while Render (RNDR) fell by 6.8% to $5.47. RNDR has since stabilized around $5.6.
It is interesting to note that Nvidia is under scrutiny by the United States Department of Justice for potential anti-competitive practices. The inquiry focuses on whether Nvidia has unfairly leveraged its market dominance, a development that could cause the company major legal and regulatory challenges.
Growing Competition
Amid the rising AI demand, startups like Cerebras, d-Matrix, and Groq are rapidly gaining ground, attracting major investments to enhance their product offerings and challenge Nvidia’s dominance. Moreover, major tech companies such as Microsoft, Meta, Amazon, Alphabet, and OpenAI, currently reliant on Nvidia’s forthcoming Blackwell processors, are also developing their own AI chips, further intensifying the competition.
Meanwhile, OpenAI is reportedly in talks to raise several billion dollars in a new funding round led by venture-capital firm Thrive Capital, potentially valuing the startup behind ChatGPT at over $100 billion. Microsoft is also expected to participate in this funding round.
Despite the short-term decline in AI tokens, the ongoing developments in the AI sector are expected to fuel a long-term surge in AI-related cryptocurrencies. The market cap of AI and big data cryptocurrencies increased by 79.7% on Monday to reach around $32 billion. Earlier this month, the market cap had plummeted to a yearly low of $18.21 billion, largely due to the broader downturn in the crypto market. As per the latest data, the market cap sits at around $29.27 billion at the time of writing.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
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With a background in finance and a passion for innovation, Anisha has been covering the ever-evolving world of crypto for over four years. Her deep understanding of the crypto market have made her a trusted source for analysis and news. Whether it's dissecting the latest trends or decoding whitepapers, Anisha is dedicated to bringing clarity to the world of digital assets.
