Nvidia's Stock Decline Sharply Raises Concerns About the Future of AI Crypto Industry

Over the past 24 hours, AI-focused cryptocurrencies, including Akash Network (AKT), FET, and RENDER, have suffered significant losses

Cryptocurrencies that focus on Artificial Intelligence (AI) have taken a hit recently, with Akash Network (AKT), FET, and RENDER all experiencing losses as Nvidia stock took a downturn.

The development comes as part of a broader market correction, with Nvidia shares falling sharply on Tuesday. Opening at $116.02, the company’s stock dropped to $108 by the close of trading. This marks a significant loss of $8.02 per share.

In total, Nvidia’s market capitalization dropped from $2.92 trillion to $2.65 trillion a record loss of $270 billion. This is one of the largest single-day market capitalization losses ever recorded for a US company.

The drop in Nvidia shares comes amid an investigation from the US Department of Justice (DOJ). According to a Bloomberg report, the DOJ issued a subpoena to Nvidia regarding violations of antitrust laws.

Antitrust officials are concerned about Nvidia’s practices, which they claim make it more difficult for customers to move to other suppliers. The report also alleges that Nvidia penalizes customers who do not exclusively use its AI processors.

Nvidia’s stock decline also indicates that investors are becoming more cautious about AI technology, which has fueled much of this year’s stock market gains.

Following the DOJ probe, AI-focused tokens quickly showed a strong correlation with Nvidia. Over the past 24 hours, AKT dropped by 8.7%, falling from an intraday high of $2.4 to $2.21.

Similarly, the Artificial Superintelligence Alliance (FET) token decreased by 6.8% in the last 24 hours to reach $10.9.

Also, AI token Render experienced a decline of 4.15% within the same timeframe to reach $4.76.

According to real-time data, the market cap of all AI tokens fell by over 6.9%, while the trading volume dipped to $1 billion.

It is worth noting that while Nvidia stock is down on the daily chart, it has seen a surge of over 118% in 2024. This surge has helped boost its market cap to over $2.65 trillion and rank it as the world’s third-largest company.

Furthermore, analysts forecast Nvidia’s revenue to reach $28.6 billion in the second quarter of this year.

Nvidia’s solid revenue performance and positive forward guidance suggest a promising future for the AI crypto industry, potentially driving up prices for related assets.

This trend has remained evident since the start of this year. As reported earlier, FET and RENDER both saw gains following Nvidia earnings reports in February and May.

However, it appears that the tables have turned, with earnings that fell short of estimates now triggering market corrections.

Both Akash Network and Render have partnered with Nvidia, operating at the intersection of the blockchain and semiconductor industries.

Through this collaboration, Graphics Processing Units (GPUs) are distributed and offer solutions on the blockchain networks.

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