Crypto: The DoJ Targets Nvidia, Panic Over AI Tokens

The crypto ecosystem related to artificial intelligence (AI) suffered a major setback this Wednesday, following the stock market collapse of Nvidia. The graphics chip giant is facing a subpoena from the US Department of Justice (DoJ), causing shockwaves in the markets.

A brutal fall for Nvidia and AI tokens

Nvidia’s market capitalization plunged by $280 billion in a single session, dragging many AI-related tokens down with it. This brutal correction follows the announcement of an antitrust investigation led by the DoJ into the business practices of the AI chip leader.

The investigation focuses on potential anti-competitive practices, including pressures exerted on Cloud Computing providers to purchase multiple Nvidia products. The giant is also accused of overcharging its network hardware to customers wishing to use competing chips.

Bittensor (TAO), the main crypto project focused on AI, saw its price plunge by 12%. Other major players in the sector were not spared: Fetch.ai (FET) and Render (RNDR) fell by 9% and 7% respectively. The same goes for Near Protocol (NEAR) and The Graph (GRT), which dropped by nearly 9% during the day.

This close correlation between Nvidia and AI cryptos is explained by the company’s ultra-dominant position in the market for chips dedicated to artificial intelligence. With nearly 90% market share, Nvidia has become an essential barometer for the entire AI ecosystem, including in the crypto sphere.

Extreme volatility, from euphoria to uncertainty for AI cryptos

This brutal correction contrasts sharply with the recent surge in the sector. The market capitalization of AI tokens had soared by 13.7% on August 24, driven by optimism surrounding Nvidia’s expected quarterly results.

The DoJ investigation raises concerns about a possible brake on innovation if Nvidia had to revise its business strategies. This uncertainty casts a shadow over the AI blockchain ecosystem, whose rise is closely linked to the technological advances of the chip giant.

The future of AI cryptos now seems to hinge on the outcome of the antitrust investigation. A favorable outcome for Nvidia could quickly revive the market. Conversely, a binding decision could lead to a deep restructuring of the AI landscape, with notable repercussions on the crypto sphere.