Uranium Stocks Sink as DeepSeek Sparks AI Data Center Energy Concerns

The uranium sector took a hit on Monday (January 27) as investors responded to broader concerns stemming from the emergence of DeepSeek, a Chinese artificial intelligence (AI) chatbot.

Cameco (TSX:CCO,NYSE:CCJ), a leading uranium producer, saw its shares fall by as much as 14 percent that day before closing 15.04 percent lower at C$68.26 on the Toronto Stock Exchange.

Its decline followed a widespread selloff across the uranium sector, with peers Denison Mines (TSX:DML,NYSEAMERICAN:DNN) and NexGen Energy (TSX:NXE,NYSE:NXE,ASX:NXG) also experiencing double-digit losses.

Uranium companies have seen support in recent months on the back of energy demand expectations for AI data centers. The International Energy Agency projects they will consume electricity at levels equivalent to Japan by 2026.

Investor sentiment shifted this week on concerns that DeepSeek's efficiency could disrupt these demand forecasts.

The AI product, reportedly developed at a much lower cost than its western counterparts, has raised questions about the future of American AI dominance and the potential shift in global energy demand tied to data center operations.

TransAlta (TSX:TA,NYSE:TAC), a Canadian utility company, also faced significant losses on Monday, with shares dropping 22 percent at one point and closing down 20.57 percent at C$15.37.

The Calgary-based firm recently announced ongoing discussions with multiple hyperscalers regarding data center developments in Alberta, a move anticipated to align with rising demand for electricity.

Cameco's downturn also coincided with the news that its partner, Kazatomprom (LSE:KAP,OTC Pink:NATKY), has resumed production at JV Inkai, a uranium mine in which Cameco holds a 40 percent stake, after a brief production halt.

Production at the site, located in Kazakhstan's Turkestan region, had been suspended since January 1, 2025, due to delays in project documentation approvals from Kazakhstan's energy ministry.

Cameco expressed disappointment earlier this month when operations were halted unexpectedly. Kazatomprom confirmed on Monday that the approval issue had been resolved and that mining had resumed at Inkai's block No. 1.

The Kazakh company assured stakeholders that it remains committed to meeting its contractual obligations, citing sufficient uranium inventories to manage deliveries through 2025.

The broader uranium market selloff extended to the Sprott Physical Uranium Trust (TSX:U.U,OTCQX:SRUUF), which functions as a closed-end investment vehicle holding physical uranium assets.

It fell 8.69 percent on Monday, closing at C$15.12. The Sprott trust's market capitalization currently stands at US$6.14 billion, with its assets primarily consisting of uranium oxide in concentrate and uranium hexafluoride.

Launched in 2021, it has gained attention as a vehicle for investors seeking exposure to uranium.

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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.