DeepSeek Revolutionizes Artificial Intelligence and Shakes Financial Markets

The energy sector remains crucial for AI development, with uranium playing a vital role in the transition to a more efficient and sustainable infrastructure.

The Chinese artificial intelligence company DeepSeek has made a significant impact in the tech world, surpassing ChatGPT in downloads and triggering major movements in the stock market. At the same time, uranium prices, a key resource for the energy industry that could drive the AI revolution, fell by 5% on Monday night.

DeepSeek Surpasses ChatGPT in Downloads

The AI chatbot DeepSeek, created by tech entrepreneur Liang Wenfeng, has rapidly climbed to the top of the iPhone App Store's download list, surpassing ChatGPT, Threads, and Google. Remarkably, it has achieved this success with fewer resources compared to its competitors. While top AI companies train their models with supercomputers using up to 16,000 integrated circuits, DeepSeek has optimized its performance with around 2,000 chips from Nvidia's (NASDAQ: NVDA) H800 series.

Tech Stock Decline

DeepSeek's launch had an immediate impact on financial markets, causing a sharp drop in the stock prices of several tech companies. On Monday, Nvidia shares fell by 16%, Taiwan Semiconductor Manufacturing (NYSE: TSM) declined by 11%, and Oracle (NYSE: ORCL) dropped by 15%. These declines resulted in a $1.6 trillion loss on Wall Street, according to The Australian. However, a partial recovery was observed on Tuesday, with these companies' shares rebounding by 3%.

Uranium Prices Decline

Meanwhile, uranium prices, considered essential for AI development due to their role in nuclear power generation, also experienced a drop. The spot price of uranium oxide (U3O8) fell by $3.90 per pound, settling at $67.30 per pound on Tuesday, accumulating a weekly decrease of $6.55 per pound.

According to George Heppel, an analyst at BMO Capital Markets, there were 21 market transactions totaling 1.8 million pounds of U3O8 over the past week. Despite the price drop, Heppel noted that demand continues to rise, especially from power utilities seeking prices below $70 per pound.

“The negative sentiment towards AI that we saw yesterday does not change our outlook on reactor demand through 2030, as it remains supported by significant growth in ongoing reactor construction in China,” Heppel stated in a report. “Improving economics in the uranium carry trade should provide upward support at these levels.”

Uranium Companies on the Rise

Despite the decline in uranium prices, leading industry players saw a recovery in the stock market on Tuesday. Cameco (TSX: CCO) rose by 1.2% to C$69.13 per share, Kazatomprom (LSE: KAP) increased by 1.6% to $37.60 in London, and NexGen Energy (TSX: NXE) gained 4.6%, reaching C$9.15.