Copper: A One-Trick AI Pony

Last week, I flagged how hard US households are leaning on the tech trade, with nearly half of American financial wealth sitting in stocks trading at historically high valuations.

We also detailed why that poses a global market risk as US retail goes ‘all-in.’

For us here, it’s especially relevant.

US tech valuations have fuelled a surge in critical metal mining stocks.

So it begs the question, will a future tech wreck (US stock crash) severely depress the outlook for ASX resource stocks?

In getting to that answer, I thought we’d look at the key barometer in this trade: copper.

So, let’s unpack that now.

Copper: How it looks without AI

As long-term readers would know, I’ve been bullish on copper for a long time. It was one of the key commodities that I focused on since beginning my role in 2022.

On several occasions, I pointed out that copper would very likely be trading at all-time new highs in the not-so-distant future. That call was largely based on supply.

But also an understanding of the commodity cycle and where we sat at the time.

Back then, the copper market was stagnant, unloved, and attracting little interest.  

But goodness me, things have changed. And to be honest, it was far more interesting to write about copper 2-4 years ago, that is, when it was clearly the contrarian trade.

Today, copper continues its relentless uptrend, breaking new all-time highs each and every month.

That means, there’s nothing in this market that signals contrarian anymore.

So, has the copper opportunity passed?

Well, that might depend on whether you think the copper growth story ends with a maturing US tech bubble.

So, let’s break down the numbers…

AI’s Impact on Copper Demand

According to some sources, a single large ‘hyperscale’ AI data centre can absorb somewhere between 20,000 and 50,000 tonnes of copper.

No small measure, given the number of data centres being constructed across the globe.

But how does that stack up overall?

Global data centres, along with their associated infrastructure, consumed approximately 1.1 million metric tons of copper in 2025.

That’s according to projections made by S&P Global.

No doubt about it, AI is draining a significant share of the annual copper production and certainly hints at a resource market heavily tied to ongoing AI investment.

But what matters here is the total share being driven by AI development.

How much copper does AI actually consume against other demand drivers like construction, machinery, defence and grid upgrades?

Well, for starters, the total copper mine supply was about 23.2 million tonnes in 2025.

So, to break it down simply, the monumental AI build-out that’s been hyped up as the major contributor to the copper bull market consumed the equivalent of roughly 4% of total mine output.

That’s it!

Surely there must be something more to this?

Why it doesn’t add up

Consuming roughly 4% of the overall supply is a chunky amount, but it falls well short of what we’d expect from a market that’s breaking all-time highs.

Bottom line: AI has been peddled as the primary driver of higher copper prices, but I don’t buy it.

Clearly, there’s much more to this story.

Next week, we’ll look at the REAL factors driving this copper market, both now and into the future.

Until then, take care.