Strategic Materials and AI: the Immateriality Myth Debunked
AI, more than a “cloud” breakthrough, depends on massive data‑center complexes, copper, rare earths and power, turning geopolitics into a race for strategic minerals and reshaping investment and price dynamics!!
Artificial intelligence is often celebrated as the pinnacle of digital transformation, a technology that seems to live only in the cloud. In fact, every generative model, every chatbot, rests on a planetary‑scale physical infrastructure. Data‑centers are true concrete and steel behemoths, covering vast tracts of land, housing thousands of servers and requiring ultra‑efficient cooling systems and redundant power sources.
Their energy appetite already accounts for roughly 2 % of global electricity consumption; the latest forecasts suggest that share could double by 2035. Copper, prized for its exceptional conductivity, is indispensable in the cables that feed these facilities, while the latest semiconductors—GPU, ASIC and specialised AI chips—demand rare‑earth elements, critical materials and industrial gases, creating intricate supply chains.
The explosive growth of generative AI, highlighted by the rapid surge in ChatGPT users, has driven compute capacity demand to unprecedented levels, sparking a wave of needs for energy, minerals and metals. “Energy, not compute power, will be the main bottleneck,” warned Mark Zuckerberg, underscoring that electrification is the true engine of expansion.
Geopolitically, the chip scramble has turned the US‑China rivalry into what analysts call the “semiconductor war.” China, which dominates the entire metal value chain, now wields a strategic lever that leaves Western economies exposed. The United States has poured more than $335 billion into AI‑related projects over the past decade; Beijing, in turn, has accelerated its investments, making AI the new global battleground.
This reliance on physical resources exposes structural limits: developing new mines takes decades, and only about 70 % of projected copper demand is expected to be met by 2035. The outcome is a commodities market with a fundamentally upward trend, though short‑term volatility remains high.
Governments and companies are therefore betting on diversifying supply chains, relocalising production and boosting recycling of critical materials. For investors, the entire value chain—from extraction through refining to component life‑cycle—offers concrete opportunities in a landscape of rising demand and constrained supply.