AI-focused tokens experienced a significant increase as Elon Musk announced a new AI venture, xAI, and stakeholders in his company, X Corp, will hold a quarter stake. Other AI tokens also saw a surge following this announcement and other developments in the AI sector.
AI tokens surge on market optimism
There was a noticeable buzz in the crypto market as AI tokens experienced a significant surge. This uptick was largely attributed to key developments within AI companies, fuelling an optimistic outlook for the long-term growth of this burgeoning sector. This wave of 'irrational euphoria' is a clear testament to the potential that investors see in this emerging technology.
Elon Musk's new venture spurring AI token growth
In a game-changing move, tech mogul Elon Musk revealed that shareholders of his conglomerate, X Corp, would have a significant 25% stake in his new AI venture, xAI. This announcement led to a surge in AI tokens as investors anticipated the potential growth and profits from this new venture. xAI has started testing its Grok chatbot, which has already spurred the creation of hundreds of replica tokens.
The AI token sector was further buoyed by rumors of Sam Altman's possible return to the board of OpenAI, the developer of ChatGPT. This comes after his surprising ousting last week. Despite the corporate drama and uncertainty about his return, the news stirred positive sentiment among investors, further boosting the bullish trend in the AI token sector.
AI tokens outperforming major cryptocurrencies
The bullish sentiment extended to a variety of AI tokens. Notably, Bittensor's TAO picked up by 4.2%, adding to a 77% rally over the past week. Similarly, Ocean Protocol's OCEAN, Fetch AI's FET, and SingularityNet's AGIX saw increases as much as 16%. These AI tokens even outperformed well-established cryptocurrencies such as Bitcoin, underlining the growing interest and potential in the AI token sector.
Crypto market observers are beginning to pay more attention to AI tokens, with traders widely considering this sector to be a major narrative in the possibility of a future bull run. This sentiment is similar to the optimistic outlook seen with gaming applications and decentralized finance (DeFi) tokens, which drove the majority of returns in the 2020-2022 bull market cycle.