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A conventional data center uses between 5,000 and 15,000 tons of copper. A hyperscale data center, on the other hand—the kind being built to run artificial intelligence (AI)—can require up to 50,000 tons of copper per facility, according to the Copper Development Association.

Think about that for a second. A single AI data center that uses more copper than three conventional facilities combined.

That’s why I think the AI story is about much more than just raw compute power. It also involves electrical infrastructure at a scale we’ve never seen before. And these massive facilities have an insatiable appetite for copper.

It’s not hard to see why the red metal has been on fire in 2025. It hit a fresh record high last week, surging past $11,705 per metric ton on the London Metal Exchange (LME), an increase of 32% from the start of the year. (And if you think that’s impressive, consider that gold, silver and copper are all reaching new all-time highs together for the first time in 45 years.)

Investment banks are bullish. JPMorgan expects copper to reach $12,500 per ton in the second quarter of 2026, averaging around $12,075 for the full year. UBS is even more optimistic, projecting $13,000 by the end of next year.

Why Rising Copper Prices Won’t Slow AI Buildout

Data centers currently consume about 1.5% of global electricity supply, roughly the same amount as the entire U.K., according to the International Energy Agency (IEA). The organization believes that, by 2030, demand will more than double, with AI responsible for much of the increase. That means data centers could be consuming more than half a million metric tons of copper annually by the end of the decade.

As executive chairman of HIVE Digital Technologies, I’ve watched this transformation firsthand. The infrastructure needed to power this new digital economy—whether it’s Bitcoin mining, AI training or cloud computing—is staggering. And it all runs on copper.

But here’s the thing: unlike other sectors where high input costs might take a bite out of demand, data center developers are largely indifferent to copper prices. According to Wood Mackenzie (WoodMac), the metal accounts for less than 0.50% of total project costs, which is little more than a rounding error.

Demand, then, is relatively price-inelastic. Data centers will be built whether copper is trading at $10,000 or $20,000.

A 30% Supply Deficit Could Be Coming by 2035

Here’s where I think investors should pay close attention. While demand is accelerating at a breakneck speed, supply is facing structural constraints that can’t be solved with a simple turn of the spigot.

Analysts are sounding the alarm. At a recent conference on critical minerals, the IEA warned attendees that copper is heading toward a supply deficit that could reach as high as 30% by 2035, making it one of the most vulnerable metals in global supply chains.

WoodMac, meanwhile, expects global copper demand to surge 24% by 2035, reaching nearly 43 million tons per year. To meet that demand, the industry will need 8 million tons of new mining capacity, requiring investment exceeding $210 billion.

To put that into context, total capital investment in copper mining over the past six years was only around $76 billion, WoodMac says.

Solving the Mining Bottleneck

To be clear, we’re nowhere close to running out of copper in the ground. The U.S. Geological Survey (USGS) estimates 48 million tons of identified copper resources domestically, more than enough to supply the country for decades.

The challenge is converting the raw ore into usable metal at speed and scale. Even if we wanted to rapidly develop new supply, we couldn’t. The time required to bring a new copper mine online in the U.S. averages 19 years, one of the longest in the world.

S&P Global’s research shows that, between 2019 and 2023, only four copper discoveries were made around the globe, amounting to only around 4.2 million tons. Large, high-grade deposits are becoming rarer, and when they’re discovered, getting them into production takes longer than ever.

Consider Arizona’s $10 billion Resolution copper project. Discovered decades ago, it’s now targeting 2030 for production, a 35-year timeline from discovery to first pour.

Every Major Growth Trend Is Copper-Intensive

The fundamentals supporting copper’s ongoing rally are about as solid as I’ve seen in my 40+ years in capital markets. Every major trend driving global growth right now—AI, renewable energy, electric vehicles, grid modernization—is copper-intensive.

When you have multiple banks projecting copper above $12,000 a ton, when the IEA is warning of 30% supply deficits, and when a single AI data center can consumer as much copper as three conventional facilities, it’s time to pay attention.

As I’ve said during previous copper cycles, we may need a telescope to see where prices are headed. This time, with AI adding fuel to an already tight market, that telescope might need to be pointed even higher.

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