Markets Punish India Power Stocks on DeepSeek Fears. But They Barely Do AI

Indian utility stocks are tumbling as markets react to DeepSeek's AI developments, even though data centers in India account for just 3% of global capacity and local consumption and their bullish future projections remain negligible.

JSW Energy and Hitachi Energy India have dropped 14% this week, and Tata Power and Power Grid fell by more than 4% before slight recovery.

India currently has 1 gigawatt of data center capacity (3% of global market), while it accounts for 20% of global data generated.

Furthermore, India’s power demand in 2030 is expected to reach 330 gigawatt peak and 1,950 billion units, as per CEA. Considering India's data center capacity scales to even 5 gigawatt by 2030 (which is what many analysts are estimating), they will still require only about 50 billion units by 2030 – only 3% of the country's projected power demand.

By comparison, electric vehicles are expected to use 100 billion units and green hydrogen facilities 110 billion units.

"Hence, as the world tries to decipher this event and debates whether efficient models might drive more usage- and hence more overall computing need - the relevance to Indian power demand is limited for now," Bernstein analysts wrote in a broader report.

This contrasts with the United States, where data centers are driving significant electricity consumption growth. Indian data centers represent just 3% of global capacity, despite the country generating 20% of global data traffic.

The market reaction mirrors broader declines in global utility stocks, with U.S.-based Vistra Energy falling 25% and Constellation Energy dropping 23% since January 27.