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Nuclear Stocks Tumble as China's AI Breakthrough Threatens U.S. Tech Dominance

Nuclear Stocks Tumble as China’s AI Breakthrough Threatens U.S. Tech Dominance

Nuclear Energy Stocks Plummet as Chinese AI Tool Sparks Investor Concerns

Nuclear energy stocks experienced a sharp decline on Monday as investors reacted to news of DeepSeek, a new artificial intelligence tool developed in China. The emergence of this technology has raised concerns about the United States’ dominance in AI and its potential impact on nuclear energy companies that have been positioning themselves to supply power to AI data centers.

Major players in the nuclear energy sector saw significant drops in their stock prices. Nuscale Power Corp fell 24%, Vistra Corp declined 26%, Talen Energy Corp dropped 21%, and Constellation Energy Corporation saw a 20% decrease. Smaller companies were not spared, with Oklo’s shares plummeting by approximately 30% and BWX Technologies falling 10%. Even industry giant Cameco Corp experienced a 9% decline.

The sell-off marks a stark contrast to the recent optimism surrounding nuclear energy stocks, which had benefited from the AI boom due to the high energy demands of data centers. However, DeepSeek’s reportedly less energy-intensive AI model has challenged this narrative, prompting a reassessment of stock valuations and potential AI-related spending.

Jay Woods, a strategist at Freedom Capital Markets, commented on the situation, stating, “There’s widespread concern among US technology investors about DeepSeek’s cost-effectiveness and energy efficiency. This development has shaken confidence in the nuclear energy sector’s role in powering the AI revolution.”

The current downturn is particularly notable given the recent positive momentum in the nuclear energy market. Just last week, stocks in the sector had rallied on news of President Trump’s proposed $500 billion “Stargate” infrastructure project. Despite Monday’s losses, it’s worth noting that nuclear energy stocks had seen remarkable gains in 2024, with Nuscale Power up 493%, Vistra Corp up 262%, and Talen Energy up 212% before this setback.

As the market digests the implications of DeepSeek and its potential impact on the AI landscape, investors and industry analysts will be closely monitoring developments in both the AI and nuclear energy sectors for signs of stabilization or further volatility.