This digital age of technology and electrification has its perks. It has truly changed how the world lives, works, and connects, offering easy access to anything imaginable. However, this age of technology has also brought with it some heightened demand for certain resources like copper, which might soon reach a pace that production is not able to keep up with.
The dark side of the rise in our digital age
Digitisation and technological advancement certainly have their perks, with improved communication, easy access to information, advancements in healthcare, productivity, efficiency, and economic growth, and job creation, amongst numerous other benefits. While all of these are greatly helpful to the world, they have an unfortunate downside that can go unnoticed.
Increased reliance on digitization and technology means an increase in the need for electricity. This heightened power demand relies heavily on copper, as it is one of the best conductors and essential for wiring. This element is a pretty crucial infrastructure element used in power grids and data centers, as well as for electronic devices, and even renewable energy technology like solar panels, wind turbines, and electric vehicles.
Carlos Pascual, Senior Vice President, Geopolitics and International Affairs, S&P Global Energy, explains the importance of copper:
“Several countries have deemed copper a ‘critical metal’ over the past half decade, including, in 2025, the United States. And with good reason. Copper is the connective artery linking physical machinery, digital intelligence, mobility, infrastructure, communication and security systems; the future availability of copper has become a matter of strategic importance.”
While the demand for copper isn’t an issue right now, it is the predicted increase in demand over the next few years that the world won’t be able to keep up with. One key technological development is going to cause a drastic increase, and it might surprise you.
AI data centers may be to blame for the projected increase in copper demand
It can’t have gone unnoticed by anyone that the AI industry has skyrocketed. AI data centers have been growing rapidly and are undoubtedly reshaping the global data center demand. The market is expanding hugely, and along with it is the use of electricity and its associated copper.
Whereas a normal data center uses around 5,000 to 15,000 tons of copper, an AI data center uses around 50,000 tons of copper per facility, more than 3 times the amount of a normal center.
Daniel Yergin, Vice Chairman, S&P Global, talks about the projected demand:
“Here, in short, is the quandary: copper is the great enabler of electrification, but the accelerating pace of electrification is an increasing challenge for copper. Economic demand, grid expansion, renewable generation, AI computation, digital industries, electric vehicles and defense are scaling all at once—and supply is not on track to keep pace. At stake is whether copper remains an enabler of progress or becomes a bottleneck to growth and innovation.”
This copper demand could lead to a great deficit by 2030
It’s all good and well for the demand of copper to increase, but if the supply cannot keep up, that’s when trouble hits. The IEA has predicted that copper could be in a 30% deficit by 2035, less than a decade away. This would make the metal extremely vulnerable. Copper mining in areas like the Morenci copper mine, as well as brand new locations, will need to increase drastically to avoid such a deficit and turn the supply trajectory around.
Copper is clearly a metal that is desired in all major growth changes around the world, from sustainable energy production to AI centers and more. Primary production of copper is the very foundation of the supply that needs to be reconsidered in light of the future trajectory. America may already be improving copper rush production, as should the other major nations across the globe.
Disclaimer: Our coverage of events affecting companies is purely informative and descriptive. Under no circumstances does it seek to promote an opinion or create a trend, nor can it be taken as investment advice or a recommendation of any kind.