AI Expansion Could Push Copper Shortfall to 6Mt

The rapid expansion of AI data centers is set to put additional strain on the already tight global copper market, potentially driving the supply deficit to 6Mt by 2035, according to a new report from BloombergNEF (BNEF).

BNEF estimates that copper demand from the AI sector will average around 400,000t annually over the next decade, peaking at 572,000t in 2028. By 2035, cumulative copper use in data centers could exceed 4.3Mt. This comes on top of rising demand from other industries such as power transmission and wind energy, where copper consumption is projected to nearly double by 2035.

Analysts warn that the surge in AI capacity is adding pressure to a market already constrained by years of underinvestment in new supply. Copper prices have recently slumped, falling 20% at the end of July following US President Donald Trump’s announcement of new tariffs on copper. 

With demand climbing and supply lagging, BNEF projects copper prices could reach US$13,500/t by 2028. By 2035, global supply is forecast at just 29Mt, well short of the 35Mt needed to meet demand.

Copper in Data Centers
Copper can represent up to 6% of the capital cost of a data center project due to its essential role in both electrical conductivity, maximizing power transmission efficiency, and thermal conductivity, which supports high-performance heat exchangers for cooling servers. Its ductility and malleability also make it ideal for compact components such as connectors.

Data centers use copper extensively in power cables, busbars, electrical connectors, heat exchangers, heat sinks, and power distribution strips. For example, Microsoft’s US$500 million Chicago data center required 2,177t of copper during construction. The market for North American data center infrastructure is also set for rapid growth, from US$33 billion in 2020 to US$70 billion in 2030 and US$185 billion in 2040.