Cryptocurrencies centered on artificial intelligence are facing a significant downturn following Microsoft’s decision to scale back its data center expansion plans.
The Bittensor (TAO) token experienced a dramatic decline, plummeting 10% in the past 24 hours and 24% over the last week. Render Token (RNDR) mirrored this fall, dropping 10% and 20%, while Grass (GRASS) saw a sharp decline of 20%. The combined market capitalization of all AI tokens monitored has decreased by 10% in just one day.
This downward trend is also reflected in the performance of major AI-related stocks. NVIDIA, the leading name in AI technology, has seen its shares slump over 30% from their peak earlier this year. AMD, a key player in the AI chip market, has fallen to $98, a staggering 47% drop from its recent highs, alongside considerable losses for other firms such as C3.ai and SoundHound.
The decline in AI tokens aligns with the overall market behavior of Bitcoin (BTC) and various altcoins, particularly after notable economic commentary from Donald Trump.
Bittensor, Grass, Render Tokens Decline as Microsoft Delays Data Center Projects
The drop in these cryptocurrencies was exacerbated by reports of Microsoft postponing or halting data center projects across the UK, US, Australia, and Indonesia. This slowdown in development signals that the growth of the AI sector may not be proceeding as rapidly as some analysts had predicted, especially given Microsoft’s prominence in the AI commercialization sector through its collaborations.
As one of the preeminent operators in the data center market, Microsoft invests over $74 billion each year in data infrastructure. Recent analyses have raised concerns about a potential oversupply of data centers in relation to current demand.
The surge in AI interest has drawn many developers to the cryptocurrency landscape. Bittensor stands out as a leading project, providing a decentralized platform for AI learning models, where miners contribute computing resources and earn TAO, its native cryptocurrency.
Render operates on the Solana blockchain, facilitating a decentralized marketplace where users can lease GPU power to developers. Conversely, Grass offers a unique opportunity for users to earn tokens simply by installing an application on their computers, enabling passive data monetization for enterprises.
Additionally, AI-themed meme coins have also seen their values plummet as market excitement fades. Tokens within the Virtuals Protocol ecosystem, including GAME, Luna, aixbt, and Iona, have collectively lost hundreds of millions in valuation, with GAME’s worth dropping from $350 million in January to merely $13 million today.
