Data Center - energy demand less than thought

Data center power demand is accelerating, pushing the grid to its limits and prompting tech giants to bet on next-generation nuclear reactors. But given steep costs, regulatory hurdles, and uncertain scalability, is nuclear the future of data center energy—or just another high-stakes gamble? At the end of January, Chinese artificial intelligence (AI) startup DeepSeek unveiled two large language models (LLMs)—DeepSeek-R1 and DeepSeek-R1-zero. Unlike previous generations of AI models, DeepSeek’s breakthrough reduced the compute cost of AI inference by a factor of 10, allowing it to achieve OpenAI GPT-4.5-level performance while consuming only a fraction of the power. The news upended future electricity demand assumptions, rattling both the energy and tech sectors. Investment markets reacted swiftly, driving down expectations—and share prices—for power generation, small modular reactor (SMR) developers, uranium suppliers, gas companies, and major tech firms.