USD.AI, a decentralized lending protocol that funds AI infrastructure, together with GPUs, by offering dollar-denominated liquidity, is within the information.
And, this time, it was due to its native governance token, $CHIP, that surged 19% following USDAI’s disclosure of a $1 million token buyback.
At the identical time, quantity spiked up by 331%, and it was equal to greater than 70% of the token’s market cap. In reality, at press time, $CHIP was buying and selling at $0.05058 after a hike of 8.9% previously 24 hours.
All about USDAI’s $1 million token buyback
So, for these unaware, a token buyback happens when an organization makes use of funds to buy its personal cryptocurrency from the open market. In this case, USDAI used Circle’s USDC to purchase $CHIP tokens throughout a number of cryptocurrency exchanges.
According to the disclosure, USDAI bought 22,343,372 $CHIP tokens at a mean value of $0.044756 per token. This means the corporate acquired greater than 22.34 million tokens, spending roughly $1 million in USDC.
Now, by buying tokens from the market, USDAI created further demand for $CHIP, which in flip supported its value, given the accessible provide on the market was restricted.
Elon Musk’s AI warning
However, this got here in as a shock after Elon Musk’s recent warning a couple of potential shakeout within the AI infrastructure trade. Musk warned that greater than 200 AI-focused cloud suppliers, generally known as neoclouds, may face failures as entry to financing would turn out to be more and more tough.
He described this case as,
Guppy-level loss of life and consolidation.
He added,
Debt markets have nearly completely shut off entry to cash for any firm that doesn’t have substantial income impartial of AI knowledge facilities.
As anticipated, his warning, prompted a key query going through the AI trade: Can firms maintain their progress and investments with out dependable entry to capital?
Well, the reply is easy as a result of if financing turns into more durable to acquire or buyer income fails to cowl their bills, even firms working in a quickly rising sector may face monetary strain.
Neoclouds take a success
This coincided with CoreWeave reporting $35.6 billion in excellent debt towards $5.5 billion in money and money equivalents on the finish of June 2026. It subsequently took on one other $4.2 billion in debt in September.
Meanwhile, Gartner predicted that 80% of neocloud suppliers may shut down operations by 2030 as a result of monetary strain and fractured enterprise fashions.
This got here on the heels of AMBCrypto’s previous report that regardless of rising curiosity in AI-driven buying and selling, most merchants stay cautious about giving AI full management over their funds.
At the identical time, Maelstrom Fund CIO Arthur Hayes believes an AI bubble burst may set off authorities bailouts, elevated cash printing, and inflation, probably driving traders towards different shops of worth reminiscent of Bitcoin.
Final Summary
- USDAI bought 22,343,372 $CHIP tokens at a mean value of $0.044756 per token.
- But Elon Musk warned that greater than 200 neoclouds may face failures as entry to financing would turn out to be more and more tough.
