AI tokens saw a muted rebound, with Bittensor (TAO) leading the gains at +18.7%, but many others remained deep in the red.
TL;DR…
- AI market recovers slightly: AI tokens saw a muted rebound, with Bittensor (TAO) leading the gains at +18.7%, but many others remained deep in the red.
- Bitcoin dominance surges: BTC hit a 2-year dominance high of 60.7%, trading at ~$97,800, while over $2 billion in long positions were liquidated.
- Major AI investments: Saudi Arabia announced $14.9B in AI funding, NEAR launched a $20M AI Agent Fund, and Tether is developing three AI tools.
- Security & policy shifts: OpenAI faces a data breach claim, while Google drops its pledge against AI weapon development, citing national security concerns.
Another week, another tough run for AI token holders.
Following last week’s market meltdown, the AI sector is showing muted signs of recovery, though with many AI tokens recouping much of their earlier losses.
Still, the broader crypto market remains tense, and it’s unclear whether this is merely a temporary reprieve in an extended market downturn or a more durable trend reversal.
Let’s take a look at the current state of play.
Market Overview
The last week has been a punishing time for many cryptocurrency holders.
Roughly half of all cryptocurrencies are deep in the red over the last seven days, with many altcoins trading at or close to significant support levels, while others are near their all-time lows.
Source: Bitcoin (BTC) Coin Page
Bitcoin (BTC) is holding up better than most, gaining 2.3% over the last seven days. It currently sits at around $97,800, where it is encountering resistance.
Per data from Coinglass, over $2 billion in long positions were liquidated in the last week, with Feb. 3, 2025, marking the second-largest day of liquidations over the past year.
Bitcoin's market dominance has been on an uptrend for over two years and just hit a two-year high of 60.7%.
The CMC Crypto Fear & Greed Index now sits at 35, its lowest value since September 2024.
AI Market Recap
Like most altcoin sectors, AI tokens have experienced significant volatility this past week.
Source: Top AI & Big Data Tokens Page
The sector has seen its market capitalization (mcap) grow by 1.3% over the last week to reach $34 billion—largely due to the growth of a handful of larger AI tokens.
As it stands, seven of the top 10 largest AI tokens are in the green over the last seven days. Bittensor (TAO) is currently leading the way with an 18.7% gain, while DeXe (DEXE) is the worst-performing top 10 AI token, losing 12.8% in the last week.
Source: Bittensor (TAO) Token Page
Bittensor’s strong performance this week is likely due to the upcoming launch of dynamic TAO (dTAO), which will change the current TAO emission schedule to reduce the impact of bad actors in the network (more on this later).
Some of this week’s best-performing AI tokens include:
- Venice Token (VVV): gained 149%
- Grass (GRASS): gained 23.1%
- PARSIQ (PRQ): gained 23.9%
- Cookie DAO (COOKIE): gained 17.6%
But it wasn’t all sunshine and rainbows in the AI sector this week. Many tokens were hit hard and were unable to recoup their losses.
Some of this week’s worst performers include:
- Mode (MODE): lost 44.7%
- yesnoerror (YNE): lost 44.7%
- Oraichain (ORAI): lost 22%
- Spectral (SPEC): lost 21.6%
The AI Agent sector has been hit harder, with six out of the 10 largest AI agent tokens by mcap down over the last seven days. Swarms (SWARMS) stands out as the best-performing AI agent, with a 35.2% weekly gain.
>> Keep tabs on your favorite AI agent tokens here.
According to DefiLlama's narrative tracker, the AI sector was among the worst-performing sectors based on mcap-weighted returns. Outperformed by other categories, it saw a -11.5% mcap-weighted return over the last weeks.
AI News Roundup
Despite the mixed performance of AI tokens this week, the industry has seen significant development behind the scenes.
Some of this week’s most significant AI sector news stories include:
Saudi Arabia Reveals $14.9 Billion AI Investment Plan: At LEAP 2025 in Riyadh, Saudi Arabia announced over $14.9 billion in AI and infrastructure investments. Key deals include a $1.5 billion partnership between Groq and Aramco Digital to expand AI-powered cloud computing, and a $2 billion collaboration between Alat and Lenovo to establish an AI and robotics-based manufacturing center. (source)
OpenAI Investigates Potential Data Breach: A threat actor claims to have stolen the login credentials of 20 million OpenAI users and is offering them for sale on a dark web forum. OpenAI is investigating these claims but has not found evidence of a system compromise to date.
NEAR Foundation Earmarks $20 Million for AI Agents: The NEAR Foundation has launched a $20 million AI Agent Fund to invest in decentralized AI applications and agent tokens. The fund will support projects leveraging blockchain for AI-driven solutions in consumer and enterprise markets, with on-chain deployment planned over the next few months.
Tether To Launch Three New AI Tools: Tether has announced the development of three AI-powered applications: a voice assistant, a translation tool, and a Bitcoin wallet assistant. These tools aim to enhance user experience by integrating artificial intelligence into cryptocurrency services. Additionally, Tether plans to release an open-source AI Software Development Kit (SDK) built on Bare, a JavaScript runtime from Holepunch, to encourage further innovation in AI-driven applications.
Google Backtracks on AI-Developed Weapons Pledge: In February 2025, Google updated its AI principles, removing prior commitments to avoid developing AI for weapons and surveillance applications. The company cited the need for democracies to lead in AI development to protect national security. (source)
Bittensor Dynamic TAO Set for Imminent Launch: Bittensor has introduced Dynamic TAO (dTAO), an evolution of its tokenomics and governance model aimed at enhancing decentralization. In this framework, each subnet operates its own economy with a unique "alpha" (α) token, allowing market-driven emissions and reducing central control. The dTAO rollout is currently live on Bittensor's testnet, with plans to implement it on the mainnet following a governance vote scheduled between Feb. 10-14, 2025.
>> That’s a wrap for this week’s AI recap. Join us next week for more AI news, updates, and analyses!
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