Why Shares of Cameco, Denison Mines, and Uranium Energy All Crashed Today

The uranium mining sector experienced a significant sell-off on Monday, January 28, 2025, with shares of Cameco, Denison Mines, and Uranium Energy all crashing. The price drop was triggered by two main events: the announcement of a new AI model by Chinese startup DeepSeek and Cameco's resumption of uranium production at its Inkai joint venture in Kazakhstan.

First, over the weekend, Chinese AI startup DeepSeek announced it had developed a large language model that took only two months and cost just $6 million to develop. This news implied that Western AI companies might have been wasting resources by buying more AI chips than needed, potentially reducing the demand for nuclear power to support these chips. This development raised concerns about the future demand for uranium, leading to a sell-off in uranium mining stocks.

Second, Cameco announced that its Inkai joint venture with Kazakhstan's national atomic energy company Kazatomprom had resumed uranium production after a three-week hiatus due to a clerical error. This news added to the existing concerns about uranium supply outpacing demand, further driving down uranium stock prices.

The combination of these two events led to a significant drop in the shares of Cameco, Denison Mines, and Uranium Energy on Monday, January 28, 2025. Cameco was down 13.2%, Denison Mines was down 9%, and Uranium Energy was down 10.1% through 10:30 a.m. ET.

The recent news of a new AI upstart, DeepSeek, which has developed a large language model at a lower cost and with fewer resources than Western AI models, has further exacerbated the situation. This news implies that Western AI companies may have been wasting their time and resources, potentially reducing the demand for nuclear power to support AI data centers. This development has led to a sell-off in uranium mining stocks, with shares of all the biggest uranium mining stocks selling off on Monday, January 28, 2025.

In conclusion, the price drop in uranium mining stocks, including Cameco, Denison Mines, and Uranium Energy, was triggered by concerns about reduced demand for uranium due to the emergence of a more efficient AI model and increased supply from Cameco's Inkai joint venture. Investors should closely monitor the situation and consider their investment strategies accordingly.