Bittensor (TAO) quietly changed its supply schedule this week. On December 15, daily TAO issuance dropped from 7,200 tokens to 3,600 after the network reached its first halving point. From here on, fewer new TAO enter the market each day, while all existing subnets have to compete for a smaller reward pool.
At the same time, a new hardware-focused subnet went live, pushing Bittensor beyond software-only AI and into chip design.
With the TAO price trading around $262.20, the question many traders are asking is whether this is the quiet setup for something much bigger.
What you'll learn 👉
The TAO Halving Changes the Math
The halving instantly reduced the flow of new TAO entering the market. They went from a rough 26% annual inflation down to about 13%, which shifts Bittensor into a much tighter supply environment.
This is echoing exactly what happened with Bitcoin during its early market cycles: price action didn’t react immediately, but the long-term impact showed up later.
So far, the market response has been scant. The TAO price slipped slightly after the event, which fits the classic “sell the news” behavior seen around major protocol milestones.
But under the surface, the structure of the network has changed. Subnets are now competing for fewer rewards, and inefficient models are being pushed out faster.
The $TAO halving is live.
— Gordon Frayne (@gordonfrayne) December 15, 2025
Now emitting 3,600 $TAO /day.
Subnets are now competing for less rewards in a closed economy.
This is the compression moment.
The margins get tighter, the pressure gets real, and most of what isn’t working will be exposed.
The real subnet winners… pic.twitter.com/rZ0Ry36KLy
Why AI Hardware Subnets Are a Big Deal
One day after the halving, ChipForge launched as a new Bittensor subnet focused on AI hardware design. Instead of training models, developers compete to design RISC-V processors optimized for edge AI.
The best designs earn rewards, and early results suggest costs can be reduced to a fraction of traditional chip development.
This matters because it opens Bittensor to an entirely new market. It is projected that by the end of the decade, tens of billions of dollars will be the worth of AI hardware.
By open-sourcing chip design, Bittensor is essentially throwing down the gauntlet to find out if decentralized incentives can produce something that can stand up against the proprietary ecosystems coming from places like Nvidia and Google.
If even a small part of this model works at scale, TAO becomes tied to something far bigger than just AI inference or training.
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Bittensor now runs with fewer rewards. Subnets have to compete harder, and only the ones that actually work will last. Weak ideas get exposed fast, while strong ones stand out.
This phase helps clean up the network. Over time, rewards shift toward subnets that deliver real results. For TAO holders, the focus is on which projects survive, not quick price jumps.
Even after a big drop from its highs, Bittensor still gets a lot of attention in the AI and crypto space. Price hasn’t caught up yet, but that often happens later, once real usage and bigger players step in.
What This Could Mean for TAO Price
At $262, TAO is trading far below its previous highs, even as supply growth slows and use cases expand. If AI hardware subnets gain traction and subnet competition produces real economic output, TAO role in the network becomes harder to ignore.
This does not guarantee a straight move higher. The halving creates pressure, not instant upside. But if Bittensor succeeds in turning decentralized competition into usable AI hardware and software, the value proposition shifts.
In that scenario, Bittensor (TAO) is no longer just a token tied to AI narratives. It becomes a scarce asset sitting at the center of a growing intelligence marketplace. Whether the market prices that in quickly or slowly is still unknown, but the groundwork is now in place.
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