DeepSeek’s Rise Hits Tech Stocks, Uranium Prices

Chinese AI company DeepSeek has surpassed ChatGPT in downloads, sparking a sharp selloff in major tech stocks. This downturn has also driven a decline in uranium spot prices, highlighting concerns over AI-driven energy demand.

DeepSeek’s AI chatbot has soared to the top of iPhone’s app download rankings, outperforming ChatGPT, Threads, and Google. Despite being developed with fewer resources than its competitors, DeepSeek’s R1 model has rapidly gained traction. While top AI firms train their models using supercomputers with up to 16,000 integrated circuits, DeepSeek relies on approximately 2,000 Nvidia H800 chips.

Following DeepSeek’s rise, tech stocks saw a steep decline on Jan. 27. Nvidia dropped 16%, Taiwan Semiconductor Manufacturing fell 11%, and Oracle lost 15%. The combined losses wiped out US$1.6 trillion from Wall Street. However, all three stocks rebounded by nearly 3% on Tuesday.

Uranium oxide (U3O8) also declined by US$3.90/lb to US$67.30/lb, marking a weekly drop of US$6.55/lb. Despite the decline, major uranium producers saw gains, with Cameco rising 1.2% to CA$69.13, Kazatomprom increasing 1.6% to US$37.60 in London, and NexGen Energy climbing 4.6% to CA$9.15.

“Despite Monday’s shift in AI sentiment, our long-term reactor demand outlook through 2030 remains unchanged, supported by ongoing reactor construction in China,” George Heppel, Analyst, BMO Capital Markets, stated. He also emphasized that improving conditions in the carry trade could help stabilize prices at current levels.