DeepSeek is an AI development firm based in Hangzhou, China. DeepSeek focuses on developing open source Large Language Models (LLM). A large language model is a type of artificial intelligence algorithm that applies neural network techniques with lots of parameters to process and understand human languages or text using self-supervised learning techniques. The company's first model was released in November 2023. The company has repeated multiple times on its core LLM and has built out several different variations. On Jan. 20, 2025, DeepSeek released its R1 LLM at a fraction of the cost that other vendors incurred in their own developments. DeepSeek is also providing its R1 models under an open source license, making it free to use.

Deep Seek’s R1 LLM will also have far-reaching impacts for the energy sector. Not only is DeepSeek far cheaper than its rivals, it also claims to be far more energy efficient. This is an important declaration, as data center energy demand growth has recently been pushed to extreme heights thanks to the enormous spread of AI. The scale of these newfound energy needs are so significant that it has single-handedly destroyed the tech sector’s hopes of meeting its own decarbonization goals, placed stress on energy grids around the world, and threatened the energy security of entire nations. The scale of the challenge posed by data center demand poses a serious money-making opportunity for energy providers. “Energy firms ranging from small reactor startups to incumbent utilities to gas producers — and plenty in between — see data centers as a critical U.S. market,”

One segment of the energy industry that could potentially benefit from the expected data center boom is nuclear power. Older power plants have been closing across the country for the past decade. Yet, atomic power has seen a surge in interest and investments in the last year, as owners revive shuttered plants and tech companies seek contracts for the electricity. 

Nikki Hsu, Analyst for Bloomberg Intelligence Utilities, said that power demand is going to climb from homes and factories that are increasingly shifting to electricity. “Demand is definitely going to rise, but by how much, we don’t know,” she said. “Nobody knows exactly what AI demand will be.” 

Rob Thummel, Senior portfolio manager at Tortoise Capital, asserts that AI will boost natural gas. He alluded that natural gas could steal some of growth from nuclear power developers, since reactors typically take longer to build and are far more expensive than gas plants. “We still think natural gas will be a winner here, primarily because it is the lowest cost from a reliability perspective,” Thummel said.

DeepSeek’s efficiency could even lead to more widespread use of AI. According to Carlos Torres Diaz, head of power markets research for Rystad Energy, “if data centers become more efficient, they may end up simply processing more data — making it difficult to model their future energy use.”

It is important to remember that if you download Deep Seek, then all of your data will be sent back to China. However, since Deep Seek open sourced its  R1 LLM , then it is available to everyone. Venture capitalist and newly appointed AI and crypto czar for the White House, David Sacks, stated in an interview with Fox Business that  Perplexity and Ollama are two American hosted companies that will allow you to have access to Deep Seek without sending all your data back to China. 

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