Recent moves by Elon Musk and speculation around Sam Altman have sparked a rally in AI tokens. Amidst this rally, the overall AI token market reached a combined capitalization of about $6.8 billion.
Artificial Intelligence (AI)-related tokens saw a significant surge over the weekend, fueled by news from key industry players.
One major influence on the market was the announcement that X Corp, part of Elon Musk’s diverse conglomerate, will own a 25% stake in the new AI venture, xAI. This development was viewed by traders as a bullish signal for the sector, sparking the growth in token prices.
Additionally, rumors initially suggested that OpenAI founder Sam Altman might rejoin the company, further boosting sector sentiment. However, it was later revealed that Altman plans to join Microsoft, although this revelation had no corresponding negative impact on the sector.
Currently, the AI token category on CoinGecko features nearly 80 AI projects, with a total market capitalization of around $6.8 billion. Many projects in this category have experienced growth of 50-100% over the last 7 days.
Over the past week, the top performers in the sector were Synesis One, with a remarkable 153% gain, followed by Mozaic at 105%, and Nuco Cloud close behind with a 98% increase. Additionally, the largest projects in this category, including Bittensor, Render, and Fetch.ai, also saw significant growth, ranging from 30 to 90%.
Notably, Bittensor has emerged as the largest AI project in the market, boasting a market cap of $1.58 billion. Its token has grown more than fourfold in the last 30 days. The project is marketed as an open, decentralized, and incentivized P2P network. However, despite its large market cap, it has not been listed on any major exchanges.
Source: Coingecko.com
Interestingly, the overall AI token surge seems more speculative than based on concrete project developments. Investors are eagerly buying up “anything AI,” hoping for high returns. Yet the quality of these projects is not always keeping pace with their soaring prices.
This enthusiasm, starting with ChatGPT’s launch last November, mirrors the frenzy for meme-tokens. These tokens are very reactive to trends, particularly those related to Elon Musk.
In line with this, the aforementioned X Corp announcement also influenced meme-tokens. GROK, for instance, inspired by Musk’s AI chatbot Grok, climbed by 29%. Additionally, a number of “XCorp” tokens emerged, further demonstrating the market’s quick response to news involving Elon Musk’s ventures.
When investors jump in on another meme or AI token, they should definitely consider the fundamental drivers of the growth. Very often, as the hype dies down, projects that have risen a lot have little to show for it, and their prices fall even more quickly than they grew.