Vistra (VST) is sinking 28% today after Chinese start-up DeepSeek reportedly unveiled AI models that were produced using old chips and much less computing power than the AI offerings of OpenAI and Meta (META). However, DeepSeek’s models are at least as proficient as those of OpenAI and Meta, according to multiple reports.

VST sells electricity and natural gas.

Why DeepSeek’s News Is Pulling Down VST

The Chinese tech firm reportedly used about 50,000 of Nvidia’s (NVDA) H100 chips, unveiled back in 2022, to develop its AI models. This news is leading to speculation that fewer of Nvidia’s latest, power-hungry chips will be utilized to create AI in the future, while U.S. data centers may not expand as rapidly as previously thought.

The Electricity Demand Outlook Is Being Rethought

It was previously believed that electricity production had to climb a great deal to power both chip manufacturing and data centers. But given the doubts that have now arisen about the demand for chips and the proliferation of data centers going forward, the Street is worried that there will be much less need than previously expected for electricity over the long term. As a result, VST is tumbling today.

While we acknowledge the potential of VST, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than VST but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock .

READ ALSO 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock

Disclosure: None. This article is originally published at Insider Monkey.