Shares of nuclear power providers tumbled on Monday as markets reacted to the success of a Chinese startup’s AI model that challenges the performance of the most advanced American models but demands a fraction of the computing power.

Vistra (VST) was the worst-performing stock in the S&P 500 in afternoon trading as its shares tumbled nearly 30%. Competitor Constellation Energy Corp. (CEG) was also down more than 20%, making it the second-worst performing stock in the index. 

The share prices of both companies have soared in the last year amid an AI-driven surge in electricity demand. Tech giants like Microsoft (MSFT) and Amazon (AMZN), desperate to develop the most powerful AI models, have turned to nuclear as a carbon-free source of power for their data centers. Microsoft last year struck a deal with Constellation to restart one generator at Pennsylvania’s notorious Three Mile Island nuclear facility. And Amazon has invested in the development of small modular reactors to power its data centers. 

The rising popularity of Chinese startup DeepSeek’s newest open-source AI model has sparked concern on Wall Street that cutting-edge AI may not need as much computing power as expected. DeepSeek’s AI model is estimated to run at just a tenth of the cost of leading U.S. models, like Meta’s (META) Llama.

Jefferies analysts on Monday wrote DeepSeek’s success could force the American AI industry to “refocus on efficiency and ROI, meaning lower demand for computing power as of 2026.” That, they said, could put U.S. executives “under more pressure to justify raising AI capex,” raising the prospect that surging electricity demand could abruptly plateau. 

Those doubts spooked investors in utilities stocks like Vistra and Constellation Energy, which have both more than doubled in value in the last year and depended on the AI boom for their rich valuations.