The not so sexy boom coming up : Copper

Picture Credit: Medical News Today

Artificial intelligence may be grabbing headlines with billion-dollar investments and breakthrough models, but one of its biggest beneficiaries could be a far less glamorous commodity: copper. As tech giants race to build AI data centres around the world, demand for the metal is surging, creating what analysts believe could become one of the decade's biggest supply shortages.

Unlike traditional data centres, AI facilities require significantly more computing power, advanced cooling systems and larger electrical networks. According to industry estimates, an AI data centre can consume up to three times more copper than a conventional facility. Analysts at UBS and Wood Mackenzie now forecast a refined copper deficit exceeding 400,000 tonnes in 2026, as booming AI demand collides with production disruptions in major mining countries including Chile, Peru and Indonesia.

The longer-term outlook appears even tighter. The International Energy Agency (IEA) estimates that currently planned mining projects will supply only around 70 per cent of global copper demand by 2035, raising concerns over persistent shortages. Chile and Peru remain the world's largest copper producers, while the Democratic Republic of Congo and Indonesia are rapidly expanding production and are expected to benefit from higher prices if supply remains constrained.

For the technology sector, copper could become an unexpected bottleneck. Building AI infrastructure requires enormous quantities of electrical wiring, transformers and cooling equipment, all of which depend heavily on copper. Rising prices and limited supply could increase construction costs for hyperscale data centres and potentially slow AI expansion projects in fast-growing markets such as India, where major cloud providers are investing billions in new computing facilities.

For investors, the story highlights the often-overlooked physical infrastructure behind the AI revolution. While semiconductor companies and AI software firms dominate market attention, the metals powering this transformation may prove equally important. As artificial intelligence reshapes industries worldwide, copper is quietly emerging as one of the most strategic commodities of the digital age, demonstrating that the future of AI depends not only on advanced algorithms, but also on the raw materials beneath our feet.