By Adriano Marchese

Shares of Canadian uranium producers fell sharply Monday after China's unveiling of its low-cost DeepSeek artificial-intelligence model cast fresh doubt on whether the AI boom will demand the massive energy consumption that many had anticipated.

The emergence of the Chinese AI startup company, which puts it in competition with the likes of other AI companies such as OpenAI, has prompted new questions on the need for significant energy requirements--particularly from nuclear sources--to power massive data centers.

Canadian producers of uranium, which is used to fuel nuclear power, took a hit Monday, in step with the broad selloff in tech stocks. Among the biggest decliners of the session were Cameco, NexGen Energy, Denison Mines and Energy Fuels. Cameco fell 11%, NexGen Energy was down 12%, while Denison Mines and Energy Fuels fell 9% and 9.1%, respectively.

The recent interest in uranium came as big tech firms like Amazon, Microsoft and Google all made long-term deals involving nuclear-power producers to support their growing AI-related energy needs. Nuclear power was a seen as a beacon of hope to provide the vast energy supply, which propped up Canada's uranium sector with the optimism of growing demand for nuclear fuel.

Meanwhile, independent power producers in Canada like TransAlta saw its stock fall sharply as well, in lock-step with U.S. players in the space including Constellation Energy, Talen Energy and Vistra, all of which own nuclear reactors and other power plants that could be used to supply energy to tech companies.

Write to Adriano Marchese at adriano.marchese@wsj.com

(END) Dow Jones Newswires

January 27, 2025 11:59 ET (16:59 GMT)

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