Copper Emerges as the “New Oil” in the Age of AI
01 | A Metal Quietly Reshaping the Global Economy
Amid the convergence of the energy transition and technological revolution, an ordinary industrial metal is quietly reshaping the global economic landscape.
In its latest research report “AI and Defense Put the Power Grid at the Center of Energy Security”, Goldman Sachs made a bold claim: Copper will become the “new oil.”
Behind this statement lies a profound transformation of the global energy system. As AI computing power surges exponentially, Western power grids—many of which are decades old—face mounting strain, while the renewable energy revolution reshapes the world’s power transmission networks. Copper, known for its superior conductivity and wide-ranging applications, is evolving from a traditional industrial material into a strategic resource that underpins national technological competitiveness and energy security.
Goldman Sachs analysts Lina Thomas and Daan Struyven introduced a “Grid–AI–Defense” triangle framework, revealing a key logic: AI development depends on data center computing power; data centers rely on stable and massive electricity supplies; and power stability directly impacts defense infrastructure.
Within this interconnected system, copper’s irreplaceable conductivity makes it the vital link connecting these three domains.
02 | Aging Power Grids and Soaring Electricity Demand
The global power system is facing an unprecedented crisis. Data shows that the average age of Europe’s power grids has reached 50 years, while North America’s exceeds 40—both nearing or surpassing their designed lifespans. These aging grids are inefficient and increasingly unable to bear the surging electricity demand driven by AI and renewable energy.
Among the 13 U.S. regional power markets, nine already faced critical supply tightness during the summer of 2024. Goldman predicts that by 2030, nearly all will experience power shortages.
Upgrading the grid has thus become essential. As a metal-intensive project, grid construction relies heavily on copper. Copper’s electrical conductivity is 1.6 times higher than aluminum, with a lifespan of 30–50 years—more than double that of aluminum-based systems. These physical properties make copper indispensable in power transmission.
Goldman Sachs forecasts that by 2030, grid and power infrastructure will contribute 60% of global copper demand growth, equivalent to the combined annual copper consumption of the United States and the total global copper market today. Accordingly, Goldman maintains a bullish outlook, projecting copper prices to reach US$10,750 per ton by 2027.
If aging power grids are the fuse for copper’s demand explosion, the exponential growth of AI computing power is the catalyst. As the physical carrier of AI, data centers have become major power consumers.
For instance, ChatGPT processes over 200 million requests daily, consuming more than 500,000 kWh of electricity—equivalent to the daily usage of 17,000 U.S. households. In China, one leading cloud provider’s intelligent computing park requires 300 MW of power capacity and consumes 2.6 billion kWh annually, roughly matching the yearly electricity usage of a county with 500,000 residents.
03 | AI’s Energy Hunger Deepens Copper’s Role
AI power demand continues to rise exponentially. Model parameters have grown from billions to trillions within just three years, while the electricity consumption for AI training doubles every 3–4 months. AI servers are 6–8 times more power-dense than conventional ones, each often equipped with four 1,800W power supplies, with cooling systems consuming nearly as much energy as the processors themselves.
Even energy-efficient models fail to ease the burden. According to MIT Technology Review, the supposedly efficient DeepSeek model still consumes 87% more power than Meta’s benchmark system due to longer generated responses—reinforcing Goldman’s assertion that grid upgrades are urgently needed.
Each step in AI compute scaling translates directly into higher copper demand. Every megawatt of data center capacity requires around 5 tons of copper, meaning a 300 MW AI park needs more than 1,500 tons of copper wiring. This rigid demand underpins copper’s structural revaluation.
Since September, domestic copper prices have surged, with Shanghai copper futures jumping 3.5% on September 25 to nearly RMB 83,000/ton, marking a four-month high. Spot copper climbed in tandem, and LME three-month copper breached US$10,409/ton, up 20% since the start of 2025.
04 | Supply Disruptions Exacerbate Tight Market
This price rally was accelerated by a series of disruptions at major global mines. Since September, three world-class mines have suffered major incidents:
Grasberg (Indonesia) – the world’s second-largest copper mine – declared force majeure after landslides, cutting 200,000 tons in Q4 2025.
El Teniente (Chile) – the world’s largest underground mine – was hit by an earthquake, slashing output by 300,000 tons this year.
Kamoa–Kakula (DR Congo) – lowered its 2025 guidance from 520,000–580,000 tons to 370,000–420,000 tons after a May seismic event.
Wood Mackenzie estimates these incidents will reduce 2025 global copper production by 6%. With the market already in tight balance, even a 1% supply fluctuation could trigger shortages. Copper concentrate treatment charges have fallen to –US$44.5/ton, pushing Chinese smelters into losses and forcing some to cut output.
05 | Structural Deficit and the New Demand Triad
Goldman Sachs highlights a “triple resonance” among grid upgrades, AI, and renewable energy, reshaping the copper demand landscape.
Each electric vehicle requires about 80 kg of copper—five times that of a conventional car. Every GW of solar adds 500 tons, and wind, 600 tons. By 2025, global EV sales are projected to exceed 40 million units, while solar and wind additions will surpass 1.5 TW, together adding over 3 million tons of copper demand annually.
Global copper consumption is growing at roughly 6% per year, far outpacing supply, which is expected to reach 32 million tons in 2025, against demand of 35 million tons, leaving a 3 million-ton shortfall.
06 | Long-Term Constraints and Strategic Implications
Copper mining challenges are structural. Ore grades in Chile and Peru have fallen from 1.5% in 2000 to just 0.8% today, pushing costs higher. New mine development takes up to 17 years, and only 14 new deposits were discovered globally over the past decade—down sharply from the 1990–2010 average of seven per year.
PwC warns that by 2035, 75% of Chile’s copper output could face water scarcity risks, and 32% of global semiconductor capacity may be affected by copper supply disruptions.
Meanwhile, capital markets are responding. China’s leading copper producers—Northern Copper, Yunnan Copper, and Jiangxi Copper—have all seen share prices surge alongside copper’s rally.
Policy tailwinds are also supportive: China’s Non-Ferrous Metals Industry Stabilization Plan (2025–2026) calls for accelerated resource development and expanding recycled metal output beyond 20 million tons.
Brokerage forecasts remain upbeat: Orient Securities estimates every US$1,000/ton rise in copper adds RMB 1.2 billion to Jiangxi Copper’s annual net profit.
07 | Copper’s Strategic Role in the Digital Era
The imbalance between surging demand and constrained supply is turning copper into a focal point of global geopolitical and industrial competition—its strategic significance now rivals that of oil.
China accounts for 60% of global refined copper demand, while India and Vietnam are emerging as fast-growing consumers. By 2050, India’s share alone could rise from 3% to 10%.
Copper’s dollar-based pricing also ties it closely to global monetary policy: early in 2024, prices briefly exceeded US$10,800/ton, driven by Federal Reserve rate expectations and China’s economic stimulus.
As Goldman analysts note, the previous copper cycle was driven by infrastructure; this one is powered by AI, renewables, and grid upgrades. Oil once fueled the industrial age—now copper will fuel the digital one.
In this era of global resource restructuring, copper’s value extends far beyond a simple commodity. From grid modernization and AI computing to clean energy and geopolitics, copper has become a cornerstone of civilization’s shift toward electrification and intelligence—the true “new oil” of the 21st century.
Source：Sina Finance