The recent global technology stock selloff, triggered by Chinese startup DeepSeek’s groundbreaking AI model, is impacting companies beyond the usual suspects like chip manufacturers and tech giants. Independent power producers (IPPs) experienced significant losses, raising concerns about the future of energy infrastructure and its connection to the rapidly evolving AI landscape.
On Monday, IPPs suffered the steepest declines within the S&P 500. Vistra Corp., the index’s top performer in 2024, plummeted by as much as 23%, its worst intraday performance since 2021, wiping out nearly $15 billion in market value. GE Vernova and Constellation Energy also saw substantial drops, falling 23% and 19% respectively. These losses reversed gains made following President Trump’s announcement of a multibillion-dollar AI initiative the previous week.
The impact extended beyond US borders. Siemens Energy AG’s shares tumbled as much as 22% in Europe, erasing all 2025 gains. Swedish cooling technology provider Munters Group AB, crucial for managing the heat generated by high-performance servers, also declined by 14%. Even Oklo Inc., a nuclear fission reactor company backed by OpenAI’s Sam Altman, experienced a 25% drop after surging over 60% the week prior.
These dramatic declines surpassed those of industry giants like Nvidia Inc. and ASML Holdings NV, highlighting the widespread anxiety caused by DeepSeek’s AI model and its potential to reshape the technological landscape. The model’s capabilities have raised questions about current valuations in the tech sector, particularly for companies supporting its infrastructure.
Despite the market’s reaction, Bloomberg Intelligence analyst Omid Vaziri suggests that the long-term demand for companies like Siemens Energy, Schneider Electric SE, and Legrand SA remains strong. He argues that DeepSeek’s advancements could actually accelerate AI adoption, ultimately benefiting these companies. The model’s potential to optimize energy consumption and improve efficiency in data centers could drive significant demand for their products and services.
In conclusion, while DeepSeek’s AI model has triggered a significant selloff in the energy sector, raising concerns about valuations and future growth, it also presents potential opportunities. The accelerated adoption of AI could ultimately drive demand for energy-efficient solutions and infrastructure, potentially benefiting companies that can adapt to this evolving landscape. The long-term impact remains to be seen, but the current market volatility underscores the interconnectedness of the energy and technology sectors in the age of AI.
