AI Tokens Outperform CoinDesk 20 Despite Bearish Reports

Artificial Intelligence (AI) tokens outperformed the CoinDesk 20 Tuesday, a broad measure of the performance of the largest digital assets on the market, despite bearish reports from major financial firms that argue AI’s growth potential is constrained.

Market Performance and Major AI Tokens

CoinGecko data shows that the AI token category was up 4.5% on Tuesday, while the CoinDesk 20 was up just under 1.5%. Major AI tokens include NEAR (NEAR), Internet Computer (ICP), Render (RNDR), and SingularityNet (AGIX).

Challenges and Criticisms

This market move follows a report by Goldman Sachs that criticized generative AI for limited productivity benefits, uncertain returns, and high power demands, questioning its economic viability. The report highlighted the significant increase in power demand that AI will require, with estimates indicating a jump from 3% to 8% of the total share of the grid by 2030.

Industry Insights and Future Prospects

Another report, this time from Sequoia, points out a significant revenue gap in the sector amounting to $600 billion. While acknowledging the potential economic value AI can create, the report emphasizes the need to navigate through the speculative frenzy to build important companies in the sector.

Potential of AI Tokens

AI tokens have the potential to be crucial companies in the space. Nvidia has recognized this by inviting NEAR’s founder Illia Polosukhin for a fireside chat at its GTC Conference. NEAR’s revolutionary work in natural language processing with transformers has shown promise in the industry.

While the world of crypto is known for its speculative nature, the future of AI tokens building around it remains to be seen.