Sam Altman just got hit from two sides at once. The OpenAI CEO, who also chairs the nuclear startup Oklo Inc., saw his lesser-known company take a nosedive on Jan. 27 and 28, losing 26% of its value.

The reason is DeepSeek, the Chinese AI company that stormed onto the scene claiming to build AI models as powerful as ChatGPT but with only a fraction of the energy, and as a bonus, came open-source.

Investors who had been betting on an AI-powered electricity boom panicked. Companies tied to power generation, especially nuclear, took a hit. Oklo was one of the worst casualties. The market had spent months hyping up nuclear as the future of AI energy. DeepSeek threw that entire narrative into question.

DeepSeek destroys the AI power equation

The AI industry had been operating under one assumption, which is that these AI models need insane amounts of computing power, which means higher demand for electricity. Nvidia, the undisputed leader in AI chips, has been riding that wave. So have energy companies.

Constellation Energy Corp., the biggest nuclear energy producer in the U.S., saw its stock price double in a year, thanks to the idea that AI’s hunger for power would never stop growing.

Now, that assumption looks embarrassingly absurd. DeepSeek claims that its R1 model delivers AI performance on par with OpenAI’s but requires significantly less computing power. That means fewer servers, fewer data centers, and, most importantly, less electricity.

If true, that’s bad news for every company banking on an AI-driven energy explosion—including Oklo. Altman himself acknowledged DeepSeek’s breakthrough. “Impressive,” he called it. But for Oklo, this changes everything. Nuclear isn’t like software. It’s slow. It’s expensive. And it needs guaranteed demand to justify the cost. If AI models suddenly require less power, the market for nuclear-generated electricity could shrink before Oklo even gets off the ground.

Oklo has been betting on small modular reactors (SMRs)—a new kind of nuclear power that’s supposed to be cheaper and faster to build than traditional reactors. But even “faster” in the nuclear world still means years of waiting.

Oklo’s first project, a 15-megawatt SMR in Idaho, won’t be operational until at least 2027. That’s if it even gets regulatory approval.

And that’s just one reactor. The real play was supposed to be much bigger. Oklo announced a deal last month with Switch, a data center infrastructure company, to deploy up to 12 gigawatts of nuclear power.

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