Is DeepSeek Good Or Bad News For Crypto AI Projects? #CriptoNews

Both the stock and crypto markets took a hit after DeepSeek announced that they had created a version of ChatGPT, allegedly at a fraction of the cost—5.8 million, as compared to 17.9 billion. More significantly, the model was made free and open source, challenging the dominance of AI providers.

With its cost-efficient Mixture of Experts (MoE) architecture, the China-based AI model DeepSeek could shift AI leadership away from the US. In the short term, investor fear has definitely driven volatility, as seen by the AI coin sector dropping by 10%, reflecting concerns over potential disruptions to AI-based financial services. Dr Ben Goertzel, the CEO of SingularityNET and co-founder of Artificial Superintelligence Alliance comments: “DeepSeek caused a crash in AI equities which has spilled over to a crash in AI tokens, which you see in FET price but also TAO, RNDR, etc. This is not really rational since DeepSeek is favorable for decentralized AI if you think about it logically”, highlighting the sentiment-driven crypto market.

If DeepSeek’s low-cost model proves sustainable, it could change the dynamics of how AI is integrated into crypto—but does lower cost always mean long-term efficiency? Well, there are a number of unquestionable angles where crypto, and AI agents specifically, will benefit from it, as listed by one of the crypto researchers, Alex Wacy.

Cost Efficiency In AI

The AI sector is notoriously expensive, with large language models (LLMs) requiring billions in investment and computational resources. This high cost has traditionally limited AI development to major tech companies with significant capital and infrastructure.

However, DeepSeek disrupts this status quo with an alleged new way of training models that is more cost-efficient. Unlike conventional AI models, which activate all parameters for every input, DeepSeek’s MoE selectively engages with different experts for different tasks, which makes it far more efficient and reduces cost. As a result, this has enabled DeepSeek to not only challenge existing AI providers but also outperform Llama 3.1 405B and GPT-4o in key benchmarks, particularly in coding and math tasks, which is quite astonishing.

Some AI-focused crypto projects that deal with model training and use ChatGPT have integrated DeepSeek-V3 into their platforms.

So if DeepSeek’s cost efficiency proves sustainable, it could significantly reduce the financial burden of AI-powered crypto applications, allowing decentralized AI services, onchain intelligence, and AI-enhanced DeFi tools to scale more efficiently.\

At first, many investors started to speculate about the need for AI infrastructure, which caused the NVIDIA stock price to plummet. Yet, AI researchers pointed out Jevon’s paradox, which states that greater efficiency will lead to increased demand. In other words, AI innovations will intensify with a lower infrastructure cost, driving investor interest.

Deepseek spotlighting Open Source AI

The open-source concept is not alien to crypto folks, where decentralization and transparency are core principles. However, the fact that a model performing better than some of the biggest plays in the space has been opened to the public is mind-blowing. This lowers the barriers to entry for AI-driven crypto applications without reliance on centralized providers.

Yet, with accessibility comes risk. It is unclear if something like this could cause cybersecurity threats. With deepfake generation, automated phishing scams, and more, these bad actors now have access to unprecedented tools for malicious activity, where blockchain networks must adopt AI-native defenses just to keep up.

However, leading voices in AI and crypto, such as the Artificial Super Intelligence Alliance (ASI), take a different stance. Rather than viewing DeepSeek as a security risk, ASI sees it as ‘a step towards democratizing AI within the crypto sector’. A more positive approach yet highlighting a key philosophical divide in the AI and crypto sector.

AI Sector Never the Same

FOMO and capital movements always go hand in hand with significant market news, and DeepSeek’s announcement was no exception. The initial panic saw AI-related crypto projects drop, reflecting concerns over disruption to AI-powered financial services. However, the market reaction appears to be stabilizing, with several major AI crypto projects like Bittensor and ICP recovering.

While DeepSeek has undoubtedly made the topic of AI an even hotter topic of conversation, its long-term impact on the crypto sector remains uncertain. If its cost efficiency and open-source model prove sustainable, it could accelerate AI adoption in DeFi, blockchain security, and onchain intelligence. However, the balance between accessibility, decentralization, and security risks will ultimately determine whether DeepSeek is a catalyst for innovation or a challenge to existing AI-integrated crypto ecosystems.