One of Wall Street's favorite commodity narratives is the link between copper and AI demand.
The demand logic flow is simple: AI requires enormous data centers; data centers require enormous amounts of copper; therefore, copper demand will keep rising.
On the other hand, rising capex, lower grades, and a lack of new large discoveries are hurting the supply side. It looks like a double whammy that guarantees success, yet reality is far more complicated.
While forecasts from S&P Global suggest copper demand from data centers and related infrastructure could rise from 1.1 million metric tons in 2025 to 2.5 million by 2040, those projections often assume a relatively static technological environment. In practice, AI infrastructure is evolving rapidly, shifting toward less copper-intensive solutions.
Two Key Narrative Flaws
