{"id":28798,"date":"2025-01-28T23:51:18","date_gmt":"2025-01-29T07:51:18","guid":{"rendered":"https:\/\/essential.construction\/news\/generator-advanced-nuclear-stocks-reel-as-low-cost-deepseek-chills-ai-load-growth-outlook\/"},"modified":"2025-01-28T23:51:18","modified_gmt":"2025-01-29T07:51:18","slug":"generator-advanced-nuclear-stocks-reel-as-low-cost-deepseek-chills-ai-load-growth-outlook","status":"publish","type":"post","link":"https:\/\/essential.construction\/news\/generator-advanced-nuclear-stocks-reel-as-low-cost-deepseek-chills-ai-load-growth-outlook\/","title":{"rendered":"Generator, advanced nuclear stocks reel as low-cost DeepSeek chills AI load growth outlook"},"content":{"rendered":"<p> [ad_1]<br \/>\n<\/p>\n<div>\n<div class=\"text-to-speech\">\n    <button class=\"text-to-speech__button button\"><\/p>\n<p>            <img decoding=\"async\" class=\"text-to-speech__button__icon\" src=\"https:\/\/www.constructiondive.com\/static\/images\/audio_icon.svg?482016190122\" alt=\"-\"><\/p>\n<p>        Listen to the article<br \/>\n        <span class=\"text-to-speech__button__audio-length\">7 min<\/span><br \/>\n    <\/button><\/p>\n<div class=\"text-to-speech__controls\">\n        <audio controls=\"\" class=\"js-text-to-speech\" preload=\"none\"><source src=\"http:\/\/res.cloudinary.com\/dmgi9movl\/video\/upload\/q_1\/v1738091668\/news\/text_to_speech\/deepseek-chills-ai-infrastructure_frxzzl.wav\" type=\"audio\/mp3\"><\/source><\/audio><\/p>\n<div class=\"text-to-speech__controls__text\">\n            This audio is auto-generated. Please let us know if you have <a rel=\"nofollow noopener\" href=\"https:\/\/www.constructiondive.com\/contact\/\" target=\"_blank\">feedback<\/a>.\n        <\/div>\n<\/p><\/div>\n<\/div>\n<h3>Dive Brief:<\/h3>\n<ul>\n<li><span><span><span><span><span><span>Shares of some independent power producers fell sharply Monday amid a broader selloff in technology and AI infrastructure stocks. Shares in companies with significant nuclear and gas generation fleets in unregulated markets were particularly hard-hit, with Vistra Corp. falling by more than 28%, Talen Energy more than 21% and Constellation Energy more than 21%.<\/span><\/span><\/span><\/span><\/span><\/span><\/li>\n<li><span><span><span><span><span><span>The rout came days after Chinese AI startup DeepSeek released two high-performing AI models that may have cost 45 times less to train than leading-edge products from U.S. companies like OpenAI and Anthropic, technology investor and entrepreneur Jeffrey Emanuel <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/youtubetranscriptoptimizer.com\/blog\/05_the_short_case_for_nvda\" target=\"_blank\"><span><span><span><span><span><span><span><span>said in a Saturday blog post<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span>. By Monday, DeepSeek\u2019s AI assistant had surpassed OpenAI\u2019s ChatGPT as Apple\u2019s most-downloaded free app.<\/span><\/span><\/span><\/span><\/span><\/span><\/li>\n<li><span><span><span><span><span><span>DeepSeek\u2019s success \u201ccalls into question the significant electric demand projections for the U.S. [as] AI represents ~75% of overall U.S. demand forecasts through 2030-35 in most projections,\u201d investment bank Jefferies\u2019 power and utilities research team said in a Monday note.<\/span><\/span><\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n<h3>Dive Insight:<\/h3>\n<p><span><span><span><span><span><span>Monday\u2019s selloff erased year-to-date gains for Vistra and Talen, but both stocks remain more than twice as expensive as this time last year. Constellation, too, is up about 127% year-on-year.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>Advanced nuclear technology companies Oklo and NuScale have also notched impressive gains over the past year, with Oklo more than doubling in value since its <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.utilitydive.com\/news\/small-modular-reactor-startups-oklo-nano-nuclear-energy-haleu-fuel\/715911\/\" target=\"_blank\"><span><span><span><span><span><span><span><span>May 2024 IPO<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span> and NuScale gaining 580% since January 2024. Shares of both companies were down more than 20% on Monday.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>In December, Oklo announced a <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.utilitydive.com\/news\/oklo-aurora-smr-advanced-nuclear-reactor-supply-agreement-data-center-developer-switch\/735933\/\" target=\"_blank\"><span><span><span><span><span><span><span><span>20-year deal with data center developer Switch<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span> for up to 12 GW of power at an undisclosed price. Constellation in September <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.utilitydive.com\/news\/constellation-three-mile-island-nuclear-power-plant-microsoft-data-center-ppa\/727652\/\" target=\"_blank\"><span><span><span><span><span><span><span><span>announced plans<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span> to reopen the undamaged, prematurely retired first unit at the Three Mile Island nuclear power plant on the back of a 20-year Microsoft power purchase agreement that <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.reuters.com\/markets\/deals\/microsoft-may-pay-constellation-premium-three-mile-island-power-agreement-2024-09-23\/\" target=\"_blank\"><span><span><span><span><span><span><span><span>reportedly places a significant premium<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span> on the 835-MW facility\u2019s output.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>And early last year, Amazon Web Services purchased an up to 960-MW data center campus from Talen on the expectation that it would buy power from Talen\u2019s 2,228-MW stake in the adjacent Susquehanna nuclear generating station. That arrangement has <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.utilitydive.com\/news\/ferc-interconnection-isa-talen-amazon-data-center-susquehanna-exelon\/731841\/\" target=\"_blank\"><span><span><span><span><span><span><span><span>since come under intense regulatory scrutiny<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span>.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>Amazon and Google have partnered with privately held nuclear technology companies <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.utilitydive.com\/news\/amazon-small-modular-reactor-deals-nuclear-dominion-x-energy-energy-northwest\/730022\/\" target=\"_blank\"><span><span><span><span><span><span><span><span>X-energy<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span> and <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.utilitydive.com\/news\/google-kairos-power-advanced-nuclear-reactor-data-center-electricity-demand-ai\/729876\/\" target=\"_blank\"><span><span><span><span><span><span><span><span>Kairos Power<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span> to power data centers beginning in the early 2030s. Amazon gained 0.3% and Google parent Alphabet declined 4% in Monday trading.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>These deals came amid steadily escalating projections for future load growth. In a pair of reports published last year, consulting and technology services firm ICF forecast U.S. electricity demand growing by <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.utilitydive.com\/news\/us-electricity-prices-19-percent-higher-2028-ICF\/727317\/\" target=\"_blank\"><span><span><span><span><span><span><span><span>an average of 2% annually<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span> through 2033, while the Electric Power Research Institute said data centers\u2019 share of U.S. load <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.utilitydive.com\/news\/artificial-intelligence-doubles-data-center-demand-2030-EPRI\/717467\/\" target=\"_blank\"><span><span><span><span><span><span><span><span>could double to 9%<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span> by 2030.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>Those estimates may already be out of date, said Himali Parmar, vice president of energy advisory services, interconnection and transmission at ICF.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>\u201cRelative to ICF\u2019s September report, which projected a 9% increase in U.S. electricity demand by 2028, there is a huge increase in demand,\u201d Parmar said.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>A preliminary load forecast <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.utilitydive.com\/news\/pjm-load-forecast-data-center-dominion-virginia\/735056\/\" target=\"_blank\"><span><span><span><span><span><span><span><span>presented Dec. 9<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span> by the PJM Interconnection, which hosts proportionally more data center capacity than any other load balancing authority, showed its summer and winter peak load growing by averages of 2% and 3.2% annually through 2045, up from 1.6% and 1.8% growth in its 2023 forecast.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>But DeepSeek\u2019s apparent dramatic improvements in efficiency suggests further AI performance gains may require less energy-intensive \u201ccompute\u201d than assumed. That threatens \u201cthe bull thesis on independent power producers and most integrated utilities [that] is entirely dependent on data centers,\u201d Jefferies said.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>Jefferies&#8217; own $274 price target for Constellation \u201cis premised on 75% of the nuclear portfolio output being sold at $80\/MWh and 50% probability,\u201d it said.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>Similarly, regulated utilities were expected to benefit from data centers driving new generation needs, and \u201ca slowdown in data center projections \u2026 would have an adverse impact on the higher premium utilities that investors expect to increase rate base,\u201d Jefferies said.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>Among IPPs, Talen is best-placed in a lower-demand scenario because it \u201cis pricing in less robust data center contracting scenarios than its peers \u2026 and has a path to expanding its existing relationship with Amazon at the Susquehanna nuclear plant,\u201d it said.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>Other equities analysts suggested DeepSeek\u2019s breakthrough could actually spur demand for AI infrastructure by accelerating consumer adoption and use and increasing the pace of U.S. tech companies\u2019 investment.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>\u201cJevons Paradox states that increased efficiency can lead to increased consumption of a resource. Lower costs for AI models could lead to faster adoption by corporations and households,\u201d J.P. Morgan Wealth Management\u2019s Global Investment Strategy team <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.jpmorgan.com\/insights\/markets\/top-market-takeaways\/tmt-deepseeks-latest-ai-model-prompts-market-frenzy-but-investors-should-remember-to-stay-the-course\" target=\"_blank\"><span><span><span><span><span><span><span><span>said in a note Monday<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span>.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>On Jan. 22, President Donald Trump <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/apnews.com\/article\/trump-ai-openai-oracle-softbank-son-altman-ellison-be261f8a8ee07a0623d4170397348c41\" target=\"_blank\"><span><span><span><span><span><span><span><span>publicly touted<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span> an AI joint venture, dubbed Stargate, that could see OpenAI, Oracle and SoftBank invest $500 billion in U.S. data centers in the coming years. Trump <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.nytimes.com\/2025\/01\/24\/climate\/coal-plants-united-states.html\" target=\"_blank\"><span><span><span><span><span><span><span><span>later suggested<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span> powering new data centers with \u201cgood, clean coal.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>Amid these technological and financial crosswinds, ICF\u2019s Parmar said it\u2019s too early to tell whether current projections appropriately account for model efficiency gains.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>\u201c[But] if some of this demand increase can be tempered by energy-efficient AI technology, that could potentially lighten the burden on the grid, associated supply needs, and impact on customer bills,\u201d Parmar said.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<\/p><\/div>\n<p>[ad_2]<br \/>\n<br \/><a href=\"https:\/\/www.constructiondive.com\/news\/deepseek-chills-ai-infrastructure\/738522\/\" rel=\"nofollow noopener\" target=\"_blank\">This article was originally posted at Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>[ad_1] Listen to the article 7 min This audio is auto-generated. 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