On December 10, the air was let out of the Artificial Intelligence (AI) cryptocurrency market after it was reported that China launched an anti-trust investigation into Nvidia, the leading AI chip maker around the world.
A single day lost 14.6% of the ADAC market cap, falling to $40.56 billion at the time of press of the hard hit tokens. Near Protocol, the largest AI coin hitting the market cap list, saw an over 8.6% drop, trading at $6.65 per coin. FET, Akash Network, and Render were hit just as hard, taking 9.6%, 9.7%, and 9.8 percent declines, respectively.
Smaller AI Tokens Suffer 12% to 16% Losses
Meanwhile, smaller AI tokens such as Bittensor, Arkham, Livepeer, and Flux suffered much worse declines, gleaning losses of 12% to 16%.
After news broke that China’s State Administration for Market Regulation (SAMR) is investigating Nvidia for possible anti-monopoly law violations, AI coins fell sharply. The probe is focused on Nvidia’s 2020 purchase of Israeli chip designer Mellanox Technologies, though Nvidia has breached commitments tied to the deal, according to the SAMR.
And it rocked Nvidia, which said last month that 15 percent of its revenue comes from its Chinese customer base. On Tuesday, the company’s stock also suffered, falling 2.55 percent to close at $138.81 in New York.
But the profoundly worrying thing about the investigation for the AI sector is that Nvidia plays a crucial part in the hardware infrastructure that drives so much of the industry. The most recent news regarding Nvidia seemed to be the trigger that caused AI-related cryptocurrencies to suffer significant losses several tokens crashed in the days following a similar probe by the U.S. Department of Justice just days before.
A broader weather for the cryptocurrency market also compounded the situation. Just before 11 p.m. on Sunday, Bitcoin, the industry’s flagship cryptocurrency, suddenly crashed, plummeting from an intraday high of $100,200 to lower than $95,000. Bitcoin’s fall helped the crypto market as a whole drop by 6.8 percent and lose $1.7 billion in liquidation.
At the same time, the AI token market is seeing a heavy contraction, with traders and investors closely watching Nvidia’s legal headache and market conditions more broadly.
